Former Audi boss charged in the VW diesel scandal that won’t die

Nearly four years after the automaker admitted cheating on diesel emissions tests, and after Volkswagen has now out more than 30 billion euros on fines, settlements and other costs, its diesel emissions scandal go ons to take a toll.

Prosecutors in Germany on Wednesday charged four former employees, including one-time Audi Chief Head Rupert Stadler, for their role in the scandal.

The 56-year-old Stadler, once seen as a rising star at the Volkswagen, darings allegations that include fraud for helping conceal the fact that VW had rigged its diesel engines to illegally out emissions tests. Others caught up in the scandal include former Volkswagen CEO Martin Winterkorn who was charged in April for his suspected role in the cover-up.

What some have dubbed “Dieselgate” could yet stretch on as prosecutors in both the U.S. and Germany persevere in to look into the case and as the U.S. Securities and Exchange Commission continues to slowly move forward on its own lawsuit targeting the in seventh heaven’s largest automaker.

The scandal was uncovered by the U.S. Environmental Protection Agency in September 2015, the agency designing a “defeat device” was used to detect when one of Volkswagen’s diesels was undergoing emissions tests and then adjust the way the appliance operated. All told, more than 11 million vehicles using VW’s faulty diesels were sold in the U.S., Europe and other elements of the world, though the allegations against Stadler cover only about 434,000 of them.

The scandal originally happened to involve just one four-cylinder diesel engine primarily used in Volkswagen-branded models. But, in November 2015, Audi validated that a 3.0-liter diesel engine used in its TDI models, as well as some VW and Porsche products, had also been rigged to illegally old-fashioned emissions tests. In real-world operations, some of the vehicles produced as much as 40 times more pollutants than legally granted.

That triggered a tidal wave of legal headaches for the German carmaker, which rushed to work out settlements with U.S. and California regulators, as all right as with owners and investors. That included, among other things:

• A buyback plan for more than 400,000 of the diesel conveyances sold in the U.S., though many were subsequently repaired, owners received various levels of financial compensation;

• The origin of Electrify America, a Washington, D.C.-based company that is helping promote the sale of electric vehicles – of all brands – while also site up a nationwide public charging network;

• Additional fines and settlements have so far brought the total cost of the scandal to enveloping 30 billion Euros, or $33.4 billion at current exchange rates.

And the economic cost could go higher. VW CEO Herbert Diess acknowledged in comments earlier this year that the scandal could potter on for “years.” In May, the automaker set aside another 5.5 billion euros in contingent liabilities.

It may need to tap that to deal with the lawsuit classified by the SEC in March, the action targeting both VW and former CEO Winterkorn. The agency contends the company concealed the depth of the scandal — and the future penalties — from investors and federal regulators. Its complaint noted that, in the year before the cheating was discovered, Volkswagen broadcasted $13 billion in bonds and securities in the U.S. Their value was directly impacted once the carmaker’s scam was revealed.

The SEC has bear down on under fire itself. Among the critics questioning why it took so long to sue was U.S. District Judge Charles Breyer who, in May, said he was “completely mystified” by why the lawsuit wasn’t filed until this year. In a court filing this month, the agency guessed its “staff worked hard and as quickly as possible under very difficult circumstances.” It also said it sued at best after negotiations with VW failed to come up with a voluntary settlement.

Inferior to the indictment announced Wednesday, German prosecutors said “Defendant Stadler is accused of having been aware of the manipulations since the end of September 2015 at the up-to-date, but he did not prevent the sale of affected Audi and VW vehicles thereafter.”

Fraud and other charges were also filed object Wolfgang Hatz, a former executive who had worked on powertrain development with both the Audi and Porsche brands, as fortunately as two engineers. So far, more than a dozen one-time Volkswagen employees have been charged in the U.S. and Europe in connection with the the truth.

The highest-ranking target is Winterkorn, prosecutors in Braunschweig alleging he learned about the emissions test rigging no later than May 2014 but be deficient to notify authorities in the U.S. and Europe, while also failing to stop the use of the defeat device technology.

Oliver Schmidt, the automaker’s compliance administrator charged with working with American regulators, is now serving a seven-year prison sentence. Most of those indicted by U.S. scholars, however, remain out of reach due to the limits of German extradition law.

Despite its ongoing problems, VW has put the crisis behind it in many ways. Its offer tumbled sharply in the months after the emissions cheating was revealed. It has rebounded since then, though not reaching the highs set in the months ahead the scandal broke. Sales have also largely recovered, especially in the U.S. where, for the first half of 2019, they be create 6.8% year-over-year in an overall down market. VW’s second-quarter net profit, meanwhile, rose to 4.11 billion euros for the epoch, up from 3.31 billion a year earlier.

One big change is that the automaker has effectively abandoned sales of diesel representations in the states, though Diess said the technology will remain viable in Europe. But he has ordered a major shift in outcome development that will, going forward, put the emphasis on zero-emission battery-cars.