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VW sentenced to 3 years probation, $2.8 billion fine for diesel cheating

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A federal judge in Michigan overseeing the plea agreement negotiations between the U.S. Department of Justice and Volkswagen USA sentenced the automaker to a $2.8 billion criminal fine and three years of probation for its diesel emissions-cheating efforts. The automaker announced earlier this year that it had agreed to plead guilty to three criminal charges arising out of the 10-year conspiracy to bypass U.S. emissions regulations.

In March, VW pleaded guilty to obstruction of justice, conspiracy to commit fraud and entry of goods by means of false statements as a part of its plea agreement with the U.S. A total of seven individuals have been indicted as part of the U.S. government’s case, though only one is in custody and awaiting trial.

The $2.8 billion criminal fine represents a portion of the total $4.3 billion fine that VW agreed to as a part of the plea agreement, with the remaining $1.5 billion set aside for civil penalties.


As part of the plea agreement, the federal court also appointed former Deputy Attorney General Larry Thompson to serve as a federal compliance monitor. Thompson served as deputy attorney general from 2001 to 2003 and oversaw a part of the government’s proceedings against Enron executives.

“Volkswagen deeply regrets the behavior that gave rise to the diesel crisis,” VW said in a statement in March in announcing its decision to enter into the plea agreement. “The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear.”

The court approval of the plea deal comes amid some progress in Germany’s own investigation into the diesel crisis, which saw Audi offices raided by prosecutors and police investigators last month. German investigators also searched the offices of the U.S. law firm Jones Day in Germany, a heavyhanded move that prompted a public rebuke from VW and once again cast suspicions over the role of VW’s own counsel in the matter.
 

The approval of the plea deal also comes on the heels of VW’s settlement of 10 individual U.S. state lawsuits against the automaker, following a rush of legal filings against the company seeking hundreds of millions of dollars. Earlier in April, the automaker reached a $157.45 million agreement with Vermont, Connecticut, Maine, Delaware, New York, Massachusetts, Pennsylvania, Oregon, Rhode Island and Washington, settling a wide range of environmental and consumer protection claims. The settlement represents a fraction of what VW could have faced in litigation that would have likely dragged on for years.

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