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VW exec in US court on Dieselgate charges

February 24, 2017

A Volkswagen executive has pleaded not guilty in a Detroit federal court to charges related to the Dieselgate scandal. The 48-year-old was arrested by FBI officials last month in Florida during a family holiday.

Symbolbild VW in den USA Emblem und US-Flagge
Image: picture-alliance/dpa/A. Burgi

A former US manager for German carmaker Volkswagen appeared before a Detroit federal court on Thursday charged with conspiracy and other crimes in the company's scheme to sell around 600,000 vehicles that failed to comply with pollution standards.

The 48-year-old, who appeared before the judge wearing a jail uniform, hands cuffed and shackled in chains, faces up to 20 years in prison on fraud charges and five years on conspiracy charges. A not-guilty plea was entered on the German national's behalf.

The man was in charge of VW's environmental and engineering office in Michigan between 2012 and March 2015, where he served as the company's top compliance manager for the US. 

He was detained by FBI agents at a Miami airport as he and his family were preparing to board a flight to Germany after vacationing in Florida and Cuba. He has been denied bail as a possible flight risk.

The man is one of six middle management staff wanted by US authorities in connection with the emissions scandal. All face charges of cheating US regulators and violating environmental standards. The other accused are currently in Germany and cannot be extradited under German law.

The German car giant has admitted guilt over the scandal in the US, agreeing to pay out some $4.3 billion (about 4 billion euros) in criminal and civil settlements to the US government. That deal is still pending judicial approval.

Volkswagen has also agreed to pay out settlements totaling about $24 billion to US and Canadian car owners who were misled into buying a high emissions vehicle.  

VW compensation system under the spotlight

Volkswagen's supervisory board will meet at its Wolfsburg headquarters on Friday to discuss the firm's remuneration system, including executive salaries, bonuses and share options. Multi-million euro executive pay packages have been increasingly  scrutinized in the aftermath of the emissions scandal and multibillion dollar settlements.

It is expected that the average salary on the executive board will decrease, while a cap of 10 million euros ($10.6 million) will likely be imposed on Matthias Müller's, the VW CEO, annual salary.

It marks a significant reduction compared to recent years. The highest CEO pay package was paid out in 2011, when then-chief Martin Winterkorn's annual salary was estimated to be around 17.5 million euros, namely due to a high bonus payment after the firm recorded high profits.

However, even in less fruitful times, payouts have remained high. Last month, German media reported that the carmaker's compliance chief, Christine Hohmann-Dennhardt, would receive a payout of more than 12 million euros upon leaving the company after just 13 months in the role.

Winterkorn received his full salary for around 16 months after stepping down as CEO in September 2015 in the wake of Dieselgate. His current retirement salary is reported to be around 3,100 euros per day.

Editor's note: Deutsche Welle follows the German press code, which stresses the importance of protecting the privacy of suspected criminals or victims and obliges us to refrain from revealing full names in such cases. 

dm/se (dpa, AP)