FBI Arrests Volkswagen Exec Charged With Conspiracy To Defraud The US

Tyler Durden's picture

While various other carmakers, such as GM, Ford, Fiat and Toyota, have had their share of headaches in recent weeks worried if and when Trump will tweet about them next, the epicenter of all car scandals over the past two years remains Volkswagen, and sadly for the German carmaker things continue to get worse: according to the NYT, the FBI haed arrested a Volkswagen executive on charges of conspiracy to defraud the United States. 

Oliver Schmidt, who headed the company's regulatory compliance office in the U.S. from 2014 to March 2015, was arrested on Saturday by federal investigators in Florida, the newspaper said, citing people familiar with the matter. Starting in late 2014, Mr. Schmidt and other Volkswagen officials repeatedly cited false technical explanations for the high emissions levels, the state attorneys general said. In 2015, Mr. Schmidt acknowledged the existence of a so-called defeat device that allowed Volkswagen cars to cheat emissions tests.

VW admitted in September 2015 to installing secret software known as "defeat devices" in 475,000 U.S. 2.0-liter diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing. In reality, the vehicles emitted up to 40 times the legally allowable pollution levels. 

Schmidt continued to represent Volkswagen after the company admitted in September that cars were programmed to dupe regulators. He appeared before a committee of the British Parliament in January, telling legislators that Volkswagen’s behavior was not illegal in Europe. Schmidt is expected to be brought before court in Detroit on Monday, the NYT said.

"Volkswagen continues to cooperate with the Department of Justice as we work to resolve remaining matters in the United States. It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters," it said.

Senior VW officials are not attending this year's Detroit auto show, which is taking place this week.

James Liang, a former Volkswagen engineer who worked for the company in California, pleaded guilty in September to charges that included conspiracy to defraud the federal government and violating the Clean Air Act. But Mr. Schmidt’s arrest brings the investigation into the executive ranks.

The arrest came as Volkswagen and the Justice Department neared a deal to pay more than $2 billion to resolve the criminal investigation into the emissions cheating. The company or one of its corporate entities is expected to plead guilty as part of the deal.

The criminal case against Volkswagen, and the potential guilty plea, set it apart from other recent auto industry investigations. In settlements with General Motors and Toyota over their handling of safety defects, for example, the companies agreed to pay large fines, but did not plead guilty. Volkswagen has already agreed to pay up to nearly $16 billion to resolve civil claims in what has become one of the largest consumer class-action settlements ever in the United States, involving half a million cars.

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lakecity55's picture

When are they going to arrest Bath House Barry for Conspiracy to Defraud the US?

Eight years of Hoax and Chains!


random999's picture

where did the saudi money go again?

lakecity55's picture

Uhh, Hitlary, if my memory is correct.

Plus they paid off Bath House' student loans.

Looney's picture


I hope Rick Perry, instead of the EPA, walks into the Fed and starts destroying it.

When he is done and the Eccles Building is turned into the Federal Pencils and Staplers Depository, Perry can go to the EPA and do the same.   ;-)


philipat's picture

VW and Deutsche Bank? The US car makers and all the US Banks are just doing God's work. I wonder if their might be something else going on here?

Déjà view's picture

Bundesbank proceeding in removing 1/2 of German stacked gold held at N.Y. FED. Might as well remove all ASAP...done pissed them off...

ghengis86's picture

when do they arrest someone from GM for killing all those people with shitting ignition switches?  To my knowledge, WV hasn't killed anyone with their emissions software.

NoDebt's picture

Prison conversation:

"So, Oliver, what are you in for?"

"CO2 emissions."


LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) NoDebt Jan 9, 2017 9:47 AM

This REALLY makes me want to buy a VW for my next car.

Joe Davola's picture

The lesson, boys and girls, is - stealing billions via mortgage fraud is OK, but don't mess with mother nature!

Wonder if they gonna send him to soap on a rope prison or will ODESSA help him relocate to Bolivia.

WordSmith2013's picture

This prosecution is about one thing!




U.S. Punishes Germany For Supporting Russian Intervention In Syria
auricle's picture

Great connection. Where does GM lying to the PEOTUS about where their cars are made land on the fraud scale? 

OverTheHedge's picture

I'm baffled! Corporations are people - the corporation committed the crime, and so should be punished. All the individual executives are in no way responsible for the crimes committed by the corporation. Christ, I've built an entire ponzi scheme around that principle - they can't go changing the rules on me now! I might go to prison, and I'm nice, so I don't deserve it!

Omen IV's picture

The German government should arrest american bankers for: gold manipulation / currency rigging / fraudulent sale of CDO's / phony securities of every description / syndication without proper disclosures

put 1,000 in jail then start the prisoner trade

Diatom's picture

Some lawyer will argue that VW nitrous oxide caused more

lung cancer than Philip Morris (Altria).....


HowdyDoody's picture

That will teach the Germans for protesting about the US sending tanks towards the Russian border. Moar tanks to Germany, stat.

Countrybunkererd's picture

A dying entity will lash out in very odd ways at almost anything.  Things like war with a nuclear power, or two if you look at the s china sea.  Or things like a country that is considered as "the leader of the free world" having a dictator that awards himself a presidential medal.  This thing needs to be torn apart before we get into something truly awful.  It is possible that it is too late.  We cry about the NAZI's but how many millions has the US killed in the "promotion" of "democracy"?


... just a minute there is a knock at the door...

zeronetwork's picture

I'm so proud no US bank ever tried to defraud USA.

OverTheHedge's picture

Decline and fall of the American empire. Presidents will be having orgies with children and marrying animals next!



Silly me.


Crash Overide's picture

Was this guy a Clinton Foundation donor?

krispkritter's picture

Can we at least get him for violating the Clean Air Act? Sucked, banged, and blew for 8 years.  Stuttered worse than any engine I've ever seen once the teleprompter shut off.

DuneCreature's picture

Document fraud should do it.

As close to a slam dunk as you can get.

Let's watch the FBI drop the ball or get it stolen, shall we?

Live Hard, Hopefully The Bud Lite Commercials Will Be More Entertaining This Season 'Cause The Game Itself Is Going To Suck With Team DoJ Fucups Playing In The Jackass Play Offs, Die Free

~ DC v4.0

TBT or not TBT's picture

Mail fraud.  The genius of that!   Anything can be illegal.   

Ignatius's picture

Anything to keep the banksters safe.  My God, imagine if a high level bankster had bought one of these low end plebe vehicles.

LawsofPhysics's picture

bingo!  7+ years after the "greatest financial fraud in the history of the planet"...

...now remind me, how many bankers and financiers have gone to prison?

MasterControl's picture

The "bankers and financiers" are following regulations written by your heros in government.

Ignatius's picture

"...now remind me, how many bankers and financiers have gone to prison?"

3.  If ya don't count the one reversed conviction and the two that fell from balconies.

LawsofPhysics's picture

In other words, get long sharecropping and guillotines...

We all know what the outcome of a "let the majority eat cake" monetary experiment is...


JRobby's picture

Well....the "statement" stated that arresting, trying, convicting and incarcerating bankers would "reduce confidence in the financial system which leads to calamity"

When in fact, it would restore confidence. Always invoke the mirror or reverse logic to what they say.

Just like if they don't pay bonuses in a losing (catastrophe)  year, they will lose key talent to restore solvency and profitability. 

This shit is a little thick isn't it?


JRobby's picture

This is a sacrificial lamb. A US citizen assume?

To be safe, none of the VW Euro Bigs (of the Wig variety) will set foot on US soil. Obviously this is not settled.

Ignatius's picture

"Obviously this is not settled."

I've filled out all the paperwork, but still waiting for my cash settlement.  I hope they pay me before they hang 'em.

Bastiat's picture

After 5 years of good use we got market plus $6k.  It worked out to  $1200/yr depreciation.  Worked for me.

LawsofPhysics's picture

Once real trade stops, we start killing each other in earnest.

same as it ever was.

Jethro's picture

This is the golden window of opportunity to prepare.  Long term storage food, ammo, training, etc.  If/when the Democrats (or whoever they are replaced by) attain political ascendance, the snap-back is going to be fierce.

photonsoflight's picture

Location, location, location.

ipso_facto's picture

Until an Exec spends more than 10 years actually behind bars the 'enforcement' is nominal.

Fathead Slim's picture
Fathead Slim (not verified) ipso_facto Jan 9, 2017 9:27 AM

Bullshit. The destruction of an automaker's US operations isn't "nominal".

SubjectivObject's picture

Well, at least they're not out arresting domenstic bank executives.

And that probably because the requisite protection has been paid.

truthseeker47's picture

Apparently the "donations" to the Clinton Foundation aren't working very well anymore.

insanelysane's picture

I get how the whole thing is BS but at the end of the day, US consumers were sold a product that they were told was legal in the US when they are not legal in the US.  It is fraud.  You can change the law now and loosen the regulations for pollution but at the time that VW was selling this vehicles, the law said X, VW said the autos met X, and VW knew the autos produced Y.

BTW, I do not own a VW nor do I own a diesel engine auto.

krispkritter's picture

They pushed that diesel myth for decades in the UK, then decided that they were not so clean after all and are wanting to hit diesel owners with a penalty tax and a huge up front tax on new diesel cars. I'd be astounded by this 180 if it wasn't just par for the course these days.

Arnold's picture

DEF Free is all.

It is a pain in the ass for big rigs.

TBT or not TBT's picture

Have the DEF tank on my Jeep.  Takes me about 10k miles a refill and it is cheap.   The only thing that sucked was buying and installing a custom skid plate to protect the extra harnesses and gizmos exposed underneath it.   The software will shut you down with X miles to save Gaia if something stops working with it.  

insanelysane's picture

The owners bought these in good faith and now the car can't pass inspections.  The car is worthless now.  There is no resale value.  I find it extremely suspicious that VW never offered to switch these cars from the diesel engine to a gas one as an option.  It is very curious.

1980XLS's picture

Most states don't have an I/M test program for diesels.

VW offer (coerced)  was quite generous, if you did not want to keep your car

photonsoflight's picture

I drove a super tanker that got maybe five miles to the gallon when empty. I asked a mechanic how many miles per gallon it would get without all the pollution control. He said about fourteen. Now how does burning more then three times the fuel lessen pollution?

Max Cynical's picture

Agreed...but the punishment doesn't fit the crime. Especially with this admins selective (non) prosecution of other more egregious white collar criminals.

Taking down a global auto manufacturer over an emissions scandal is a bit much, no?

PT's picture

... and it was only VW which violated these regulations becoz they were the only ones that got caught.  Right?

Hobbleknee's picture

Did they arrest him peacefully, or did they follow SOP: corner him in his home and firebomb the place, killing 76?

orangegeek's picture

VW gets busted, but this smokescreen won't cover up #PIZZAGATE.


PIZZAGATE arrests coming soon barry you fucking pedophile.