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by Cedric Hughes, Barrister & Solicitor with regular weekly contributions from Leslie McGuffin, LL.B.   

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VW Engineer Sentenced to 40 Months in Prison for “Diesel Emissions Fraud”

Article Number: 
740

Road Rules has been writing about the Volkswagen [VW] diesel emissions scandal from the time the story first broke in the fall of 2015.  Ten articles later —over close to a two year period— the first person prosecuted in the US in connection with the scandal has been sentenced on August 25th, 2017 by US District Court Judge Sean Cox in Detroit to 40 months in prison, a US$200,000 fine, and post release supervision.

James Liang, the convicted “veteran Volkswagen engineer” is a German national who was living in the US as Volkswagen’s executive in charge of the company’s US ‘diesel competence’.  Liang pleaded guilty in 2016 to conspiracy to “falsely and fraudulently” deceive US regulators and consumers.  The sentence is less than the statutory maximum because Liang cooperated with the investigation, and reports say “prosecutors called his ‘insider’s perspective’ key to understanding how VW deceived regulators and consumers for years.”

While also acknowledging “Liang was not the mastermind behind this astonishing fraud,” the prosecution pointed out that he “took part in many of the pivotal events.”  These included “developing the defeat device in 2006 and participating in meetings with the US Environmental Protection Agency and the California Air Resources Board in 2007 to get approvals to bring the vehicles into the US.”

The prosecution also noted that Liang participated in “efforts to hide VW’s use of the device from regulators in 2015.”  “Liang knew that what he was doing was wrong,” said prosecutors, “but minimized his own moral responsibility for the fraud by reassuring himself that he was merely an engineer.”  Liang’s lawyer, Daniel Cox submitted that Liang was the first person to accept responsibility…and “he became the worldwide face of this scandal.”

Judge Cox ruled, however, that “co-operation or regret” did not excuse Liang’s conduct, and said his actions constituted “a serious crime … [involving] a massive fraud upon the American consumer.”

A second VW employee, Oliver Schmidt, pleaded guilty on August 4th to conspiracy and violating the US Clean Air Act. Schmidt, originally charged with 11 felony counts for which he could have faced a maximum of 169 years in prison entered into a plea agreement in which prosecutors agreed to drop most of the counts, and Schmidt consented to be deported at the end of his prison sentence.  Under this plea agreement, reports say “Schmidt will face up to seven years in prison and a fine of between $40,000 and $400,000 after admitting to conspiring to mislead US regulators and violating clean air laws.” Schmidt’s sentencing is currently set for December 6th, 2017, again in US District Court in Detroit.

Six other current and former VW executives connected with the US scandal have also been charged.  Deputy Assistant Attorney General Jean Williams has said, “Schmidt, along with each and every official involved in this emissions scandal, will be held fully accountable for their actions by the Department of Justice as this investigation continues.”  Most of the executives in this group, however, live in Germany, which, typically, does not extradite its citizens meaning they will likely steer clear of the US courts.

Cedric Hughes

huges & company law corporation vancouver

 

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