VW’s criminal fine and 3 year probation

Volkswagen (VW) has been ordered to pay more fines in association with its emissions scandal affecting over 11 million vehicles worldwide. However, this time, the automaker giants are paying criminal fines.

On 12^th May, U.S. Federal Judge Sean Cox sentenced VW for its criminal wrongdoing. This is after the automaker pleaded guilty to criminal charges, namely:

• Conspiring to defraud the U.S.
• Committing wire fraud
• Violating the Clean Air Act
• Obstructing the course of justice in their scheme to deceitfully circumvent pollution rules and regulations in the U.S.

These criminal activities affected around 600,000 vehicle owners in the U.S. but 11 million worldwide. They created the so-called “defeat device” which allowed the diesel vehicles to pass emissions tests, but in actual fact, the vehicles polluted up 40 times more Nitrous Oxide than originally thought in some cases.

Judge Cox highlighted the seriousness of their wrongdoing:

“…this is a very serious and troubling case involving an iconic automobile company.”

He believes that the plea bargaining – i.e. the deal VW has agreed to – has allowed for “just punishment”.

He continues to say that:

“…this is a deliberate and massive fraud perpetrated on the American consumer, and it would seem, consumers throughout the world.”

Though Judge Cox highlights that consumers globally have been affected by the scandal, it doesn’t provide a sense of justice for U.K. owners who have yet to be offered any compensation from the automaker at all.

VW’s punishment

Judge Cox’s sentence also imposes an independent monitor to audit VW’s compliance to the U.S. regulations for at least 3 years. Aside from all of the civil fines, VW has agreed to pay $4.3 billion (£3.3 billion) to settle the U.S. Justice Department investigation.

Larry Thompson has been allocated the role of leading the independent monitoring team at VW. The automaker has agreed to remain on probation for 3 years and to cooperate with other inquiries in relation to the prosecution of the VW managerial board who were (partially) responsible for the scandal.

Is VW remorseful?

VW’s legal representative, Manfred Doss, released a statement saying that VW “deeply regrets the behaviour… Plain and simple, it was wrong. We let people down and for that we are deeply sorry.”

They may be apologetic on the other side of the Atlantic Ocean, but VW has yet to admit to their wrongdoing here in the U.K. I’m completely dumbfounded that this is the case. If we take away the jurisdiction ‘category’, the consumers have been affected in the same way and must be offered compensation for their losses in our view.

Vehicle owners offered an additional 2 weeks to accept payment from civil settlement

On a separate note, Judge Cox denied the requests from some VW customers for compensation under the criminal case. VW gave affected vehicle owners who declined to take payment arising out of the civil settlement an additional 2 weeks to take the offers. The timeframe varies according to the kinds of engines in the diesel vehicles i.e. whether it’s a 2.0 or 3.0 litre engine.

VW’s potential future fines and charges

VW has already agreed to pay a whopping $4.3 billion (£3.3 billion) in civil and criminal fines. Though, many believe that the total cost of the whole scandal will total to around $21 billion (£16 billion), this will include the repairs and buy backs of the affected vehicles. However, some people believe that VW’s legal settlements in the U.S. could exceed $25 billion (£19 billion) depending on how many of the 600,000 vehicles VW needs to buy back.

Who knows how much their total bill could be if they have to compensate the 1.2 million drivers here in the U.K.

A VW engineer, James Liang, who pleaded guilty to criminal charges is due to be sentenced in May. However, other VW executives that have been suspected to be in the mix of the scandal are unlikely to appear in the U.S. to face charges as the majority of them live in Germany.