Report: Justice Department has evidence of VW criminal wrongdoing

August 15, 2016

The Wall Street Journal reported Monday (subscription required) that federal investigators have found evidence of criminal wrongdoing at Volkswagen and may be preparing to charge the automaker for crimes related to its widespread emissions scandal.

The newspaper reported that the Department of Justice and VW may be negotiating a settlement to any criminal case, although its unclear if the case will be settled by the end of the year. Any settlement would likely include a significant financial penalty and/or jail time.

Other automakers have been charged by the Justice Department for criminal acts related to safety or regulatory misconduct.

Last year, General Motors agreed to pay $900 million to settle charges with the government relating to a defective ignition switch linked to 124 deaths. In 2014, Toyota paid $1.2 billion for its part in concealing safety defects that could lead to sudden, unintended acceleration in its cars. So far, workers or executives at car companies such as General Motors and Toyota have avoided jail sentences for charges related to their scandals; in both cases federal authorities deferred prosecution.

The charges may likely be a formality. In the past, federal officials have claimed automakers committed wire fraud or lied to investigators by covering up—or even mentioning—the defects in emails or phone conversations.

The massive worldwide scandal has engulfed Volkswagen and led to one of the largest automotive consumer actions in history. Earlier this year, Volkswagen announced a sweeping $15 billion plan to buy back hundreds of thousands of illegally polluting cars from owners in the U.S.

Included in that settlement were billions set aside for EPA fines and remediation programs, which could help the automaker find some leniency from the Justice Department.

It's expected that VW's criminal penalty may top Toyota's record $1.2 billion fine from the DOJ, but terms of the proposed settlement haven't been made public.

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