Volkswagen Agrees to Plead Guilty, Pay $4.3B Settlement

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On Jan. 10, Volkswagen agreed to plead guilty to three criminal felony counts and pay $4.3 billion in penalties to settle the infamous alleged emissions cheating scandal, according to NPR. The automaker has negotiated a draft settlement agreement with the DOJ, as well as the U.S. Customs and Border Protection.

In a statement released by Volkswagen, the company will appoint an independent monitor for the next three years, according to NPR. The settlement agreement has to be approved by the company’s management and supervisory boards.

This announcement comes right after the arrest of Volkswagen emissions executive Oliver Schmidt over the weekend, according to NPR. Schmidt allegedly conspired with other Volkswagen employees to defraud the federal government by concealing the installation of a device that was designed to cheat emissions tests.

The “defeat device” was installed on approximately 500,000 diesel cars sold in the U.S. between 2009 and 2015. The device could detect when the car was undergoing emissions evaluations and adjust its nitrogen oxide emissions to comply with American standards. However, when the gadget recognized that the car was on the road, it would allow emissions up to 40 times higher than regulations allow.

This device was brought to the attention of consumers and the government in September 2015, when the U.S. Environmental Protection Agency issued a notice of violation. Volkswagen CEO Martin Winterkorn apologized for the device and ordered an external investigation.

In June 2016, Volkswagen agreed to a deal to pay $15 billion to repair or buy back polluting vehicles, according to an article by ABC News. The company also agreed to invest $2 billion in projects that support the increased use of zero-emissions vehicles, as well as $2.7 billion to mitigate the effects of the emissions from cars equipped with defeat devices.

The company also had to pay out $5,100 to $10,000 to most consumers who bought their cars before Sept. 2015. However, Volkswagen isn’t the only automaker under fire for alleged emissions standards violations.

A day after Volkswagen agreed to plead guilty, the EPA accused Fiat Chrysler of using a similar “defeat device” to allow their vehicles to cheat emissions standards, according to the New York Times. Affected models may include 2014, 2015, and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3-liter diesel engines, according to the EPA.

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