Ex-Volkswagen CEO Charged With Fraud

Daniel Fowler
April 18, 2019

The public prosecutor in Braunschweig charged former Volkswagen CEO Martin Winterkorn and four other managers with alleged fraud.

Winterkorn was CEO during a period when VW fitted 11 million diesel-powered vehicles worldwide with so-called "defeat devices" - software that made them appear less polluting in the lab than in real driving conditions.

The prosecutors allege that Winterkorn approved a software update in November 2014 at a cost of 23 million euros, which was "useless and was meant to further hide the true reason for the increased pollutant levels in normal vehicle operation".

Winterkorn and five other former executives have already been charged by United States authorities with fraud, but they can not be extradited from Germany to non-EU countries.

USA authorities indicted him a year ago on charges of conspiracy to defraud consumers.

Winterkorn's lawyer, Felix Doerr, said he could not comment on the charges because he had been denied access to important case files.

Dieselgate has so far cost the Volkswagen Group at least €29 billion in fines and penalties, with even more lawsuits waiting in the wings.

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The prosecuting authority accused Winterkorn of a breach of trust because he did not immediately disclose the illegal manipulations of diesel engines after becoming aware of them.

Lastly, investors in Germany are also seeking damages, saying that Volkswagen did not meet its obligation under securities laws to give them timely notice of troubles that could affect the stock price.

He stepped down as VW's boss in 2015.

A Volkswagen spokesman said the company would not comment on investigations against individuals. He also failed to prohibit the further installation of the so-called "defeat devices", resulting in significantly higher fines in the US and Germany, the statement said.

The Brunswick prosecutors said people accused of particularly serious fraud could face up to 10 years in prison in Germany.

The 71-year-old was charged with conspiracy by the U.S. Department of Justice in May 2018 but since he resides in Germany, which doesn't normally extradite its citizens, he's been able to avoid questioning by officials. First, the Braunschweig prosecutors are continuing their probe against 36 more suspects, according to Monday's news release.

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