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April 24, 2017

VW gets probation and independent oversight for diesel scam

A federal judge in Detroit has sentenced Volkswagen AG to three years' probation and independent oversight following the diesel emissions scandal as part of a US$4.3bn settlement announced in January.

A federal judge in Detroit has sentenced Volkswagen AG to three years’ probation and independent oversight following the diesel emissions scandal as part of a US$4.3bn settlement announced in January.

The plea agreement called for “organisation probation” in which the company would be overseen by an independent monitor, Reuters reported.

The sentencing was one of the last major hurdles to VW moving past a scandal that led to the axing of its chief executive and tarnished its reputation worldwide, the news agency noted.

“This is a case of deliberate and massive fraud,” US District Judge Sean Cox said in approving the settlement that required the automaker to make significant reforms. He also formally approved a US$2.8bn criminal fine as part of the sentence.

As well as accepting the agreement reached between VW and the U.S. government, Cox rejected separate calls from lawyers representing individual VW customers for restitution, Reuters reported.

The automaker had pleaded guilty in March to fraud, obstruction of justice and falsifying statements after admitting to installing secret software in 580,000 US vehicles.

The company has agreed to spend up to $25bn in the US to address claims from owners, environmental regulators, states and dealers and to make buy-back offers.

Speaking on behalf of Volkswagen, general counsel Manfred Doess said the company “deeply regrets the behaviour that gave rise to this case. Plain and simple, it was wrong,” he said, according to Reuters.

The US Department of Justice (DOJ) announced it had selected former deputy US attorney General Larry Thompson to serve as the company’s independent monitor.

In a statement attributed to Hiltrud Werner, board member of integrity and legal affairs, the automaker said: “Volkswagen welcomes the appointment of Larry D Thompson to this new position, and we intend to cooperate fully with his important work. We have taken significant steps to strengthen accountability, enhance transparency and build a better company and we look forward to working closely with Mr. Thompson as we press forward with the biggest change process in Volkswagen’s history.”

VW said Thompson would have a dual role as independent compliance monitor and independent compliance auditor, under the terms of its plea agreement with the DOJ and a separate consent decree with the DOJ on behalf of the US Environmental Protection Agency, respectively. Thompson would assess, oversee and monitor the company’s compliance with the terms of its settlements for a period of three years, including measures to further strengthen VW’s compliance, reporting and monitoring mechanisms and implementation of an enhanced compliance and ethics programme. He would also be tasked with certifying that the automaker’s compliance programme is able to detect something like the diesel matter and prevent it from happening again.

In a statement cited by Reuters, New York city comptroller Scott Stringer, who oversees investments in Volkswagen on behalf of the city pension funds, said VW’s “scheme was deceitful.” “Today’s massive fine underscores the extent of the fraud and the need for change at the company.”

Reuters noted the DOJ has charged seven current and former VW executives with crimes related to the scandal. One executive is in custody and awaiting trial and another pleaded guilty and agreed to cooperate. US prosecutors said in January that five of the seven are believed to be in Germany. They have not been arraigned.

German prosecutors also are conducting a criminal probe of VW’s excess diesel emissions.

“We have worked tirelessly to address the misconduct that took place within our company and make things right for our affected customers,” the company said in a statement cited by Reuters. “Volkswagen today is not the same company it was 19 months ago.”

See also: Canadian courts approve VW diesel settlement

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