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Volkswagen (VW) Diesel Scandal: Four Executives Charged with Fraud in Major Trial
On September 22, 2015, Martin Winterkorn, who was then CEO of Volkswagen (VW), publicly admitted to manipulating and embedding illegitimate software in VW diesel vehicles to deceive emissions testing. Following this confession, Winterkorn resigned, leaving the company to grapple with the extensive fallout of the deception.
The vast fraud trial targeting four former VW managers and engineers has recently come to a close in the Regional Court of Braunschweig. Yet, Winterkorn was not among the accused. He was separated from the trial for health reasons. Although his involvement was widely criticized in the absence of the highest-paid German corporate leader, the trial moved forward.
The main focus of the trial concerned the personal responsibility of the VW executives in the development and use of the manipulation software in millions of vehicles. The goal was to determine who knew what and when about the deceitful program.
After several delays due to the coronavirus pandemic, the trial, which was open to the world press, began in the city hall of Braunschweig. The defendants continually blamed each other and their superior, Winterkorn, as engineers claimed to have warned about the potential consequences of their actions. Superiors, however, argued that issues were discussed, but never regarding any illegal action or fraud.
Despite the focus on the four charged individuals, attention for the trial dwindled as it progressed without Winterkorn as the leading figure. The trial proper moved to the Regional Court's regular courtrooms, and the majority of it transpired with minimal media attention, due to the intricate technical details involved.
The scandal traces back to the mid-2000s when VW sought to boost its diesel car presence in the United States. Investigators believe that problems with compliance with emission standards precipitated the series of deceptive practices surrounding the software trick.
In September 2015, the United States Environmental Protection Agency exposed the manipulations in diesel exhaust tests. Shortly before, VW had admitted to false test results. Subsequently, the CEO resigned, plunging the company into a significant crisis.
The aftermath of the scandal led to harsh consequences such as prison sentences in the U.S., fines to the state of Lower Saxony, and compensation for approximately a quarter of a million diesel customers. Since 2018, a shareholder lawsuit against the Volkswagen Group and Porsche SE continues to seek damages for investors who suffered losses following the 'Dieselgate' scandal.
In the first criminal trial in Germany, former Audi CEO Rupert Stadler received a suspended one-year and nine-month prison sentence for fraud. Unexpectedly, the defense later filed an appeal, so the verdict remains unfinalized.
The defendants in Braunschweig viewed themselves as scapegoats; they expressed disbelief and fatigue as they endured the nearly four-year-long process. In June 2022, a former head of diesel engine development was sentenced to 4 and a half years in prison. A former head of powertrain electronics received a sentence of 2 years and 7 months. The highest-ranking defendant, a former development board member of the Volkswagen brand, received a suspended sentence of 1 year and 3 months. A former department head was sentenced to 1 year and 10 months, suspended.
According to investigators, the manipulation software was used in the sale of over 2 million vehicles. The number of affected cars in the case of the former head of powertrain electronics was approximately 3 million. Despite being classified as guilty of fraud by the prosecution, the defendants maintain they are merely scapegoats.
The legal repercussions for VW are ongoing, as additional criminal proceedings against other defendants remain pending. Other cases, including the ongoing trial of Martin Winterkorn, are set to continue. As of now, nine defendants have settled their cases with fines, and another 47 originally accused individuals have had their cases dropped during the investigation with the consent of the court.
- The environmental protection aspect of the VW Diesel Scandal was prominent as investigators believe the problems with compliance with emission standards led to the deceitful practices, affecting over 2 million vehicles.
- The trial in Braunschweig focused on the personal responsibility of the VW executives, including managers from various sectors such as industry, finance, transportation, and automotive, in the development and use of the manipulation software.
- Despite being accused of fraud by the prosecution, the defendants in the trial viewed themselves as scapegoats and expressed disbelief and fatigue as they endured the lengthy legal process, involving other aspects of the environment, including business.
