In This Story
Punishments were handed out for Volkswagen (VWAGY-2.90%) executives involved in the emissions-cheating scandal that rocked the auto industry a decade ago. Two former executives, Jens Hadler and Hanno Jelden, are heading to prison, while two others received suspended sentences.
The case slowly ground through the European legal system, finally culminating on Monday with a panel of judges in Braunschweig, Germany, a city near Volkswagen’s headquarters. It took four hours to read the sentences for the guilty.
Presiding Judge Christian Schütz said the group of defendants acted as a “gang” and described their actions as “particularly serious” fraud.
Volkswagen has admitted that some of its engineers installed software in diesel-powered vehicles that caused the cars to recognize when they were being tested for emissions and adjust their emissions to meet the standards.
A criminal court filing in the U.S. District Court of Eastern Michigan in 2017 accused six Volkswagen executives of various crimes, including conspiracy.
“Purpose of the conspiracy was for to “unlawfully enrich VW and themselves by, among other things, A) deceiving U.S. regulators in order to obtain necessary Certificates to sell diesel vehicles n the United States, B) selling VW vehicles to U.S. customers knowing that those vehicles were intentionally designed to detect, evade, and defeat U.S. emissions standards.”
The criminal complaint says the conspiracy began at least as early as May 2006 and continued through 2015.
Because the VW executives are based overseas and have not been extradited to the United States, the criminal proceedings have been on hold. The legal action, instead, has been in Europe where over 30 Volkswagon employees have been caught up in what has been dubbed the “Dieselgate” scandal
In 2015, when the scandal first began to unravel, the U.S. Environmental Protection Agency said that nearly 500,000 Volkswagen cars sold in the country between 2009 and 2015 had “defeat device” software installed, which is designed to detect when a car is being tested for emissions and lower them accordingly. Meanwhile, out on the road, these cars released up to 40 times more pollution than allowed by the rules.
Shareholders largely shrugged off the court action. Shares were trading 2% higher at opening today.
—Jason Karaian contributed to this article.