back to article Dieselgate: VW pleads guilty, will cough up $4.3bn, throws 6 staff under its cheatware bus

In one of the toughest smackdowns in recent US corporate history, Volkswagen has pleaded guilty to Dieselgate fraud charges, and will cop a massive fine. Meanwhile, six staffers have been charged regarding the engine cheatware scandal and are facing the business end of a trial. According to the US Department of Justice on …

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Urrm:

"The stiffness of the penalty and the pursuit of criminal charges against individuals is an unusually tough deal for a major corporation – and banks – in the US United States of Goldman Sachs"

FTFY.

Lets see if they get around to chasing down either Ford or GM for something similar.

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Anonymous Coward

Re: Urrm:

In a similar vein... another FTFY is:

"Typically big [American] firms are allowed to pay a fine with no admission of criminal activity, and staff never end up in the dock facing personal charges."

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Re: Urrm:

But Ford's little problem only killed a hundred people - it didn't try and cheat the federal government.

That's why it got away with a a few $M fine

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Unhappy

Re: Urrm:

Anyone up-to-date on modern prosecution practices should have noticed long ago that anything one can do to any number of people (including murdering them) warrants barely a slap on the wrist compared to the "I WILL DESTROY YOU AND EAT YOUR SOUL"-style punishments for even the slightest things one might do against either a corporation or the government... People are a dime a dozen, the state couldn't care less about what you do to how many of them. It will never make a difference in the totals. But anything else - oh, now it's personal...!

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Re: Urrm:

Yeah. You get more time for ripping off Michael Jackson's music than killing Michael Jackson.

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Re: Urrm:

The GM ignition key fault caused 124 people to lose their life in accidents, they settled for 2 billion. None of its executives, who knowingly used their power not to spend anything to have these issues fixed, were arrested.

VW tried to hide a few whiffs of diesel fumes, and gets fined 4.3 billion by a flock or US vulture government agencies. They even arrested one of their executives, and have warrants against several others.

This difference in legal action can only be explained by Goldman Sachs and their Wallstreet comrades, owning the US, using the opportunity to pick on one of the few globally successful companies that is not under their control.

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Re: Urrm:

Of course they wont chase a US company, nor stupidly will the europeans. But as many of the vehicle companies work together and share a lot of stuff then there are other as yet uncovered scandals

The US seems to be paying its overdraft by fining european companies and banks. Personally I think the best thing we can all do is stop buying americam

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Devil

Re: Urrm:

"This difference in legal action can only be explained by Goldman Sachs and their Wallstreet comrades, owning the US, using the opportunity to pick on one of the few globally successful companies that is not under their control."

no, I don't think so.

a) GM probably gave money to DEMO-RAT POLITICIANS, gaining them favor. VW can't really do that.

b) GM only killed PEOPLE. VW was *RAPING* *THE* *ENVIRONMENT*, which as we all know, is MORE IMPORTANT than people's lives [according to THE LEFT, anyway]

And of course, VW's 'hack/cheat' to pass the emissions test, albeit VERY clever, pissed the regulators off, like in "HOW DARE YOU" pissed off. So there's a bit of THAT in there, too.

So aside from the environment being GOD in the eyes of the left, or at least a 'means to an end' to CONTROL EVERYONE'S LIVES, it's DEFINITELY more important (to THEM) than people killed in car crashes due to defective equipment.

[seeing Trump's EPA will be a GLORIOUSLY REFRESHING change to what was becoming a hideous platform for the left's takeover of our lives, one back yard at a time]

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Holmes

Re: Urrm:

"You get more time for ripping off Michael Jackson's music than killing Michael Jackson."

Considering that he's been dead for a while, I'm not surprised.

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Re: Urrm:

Oh --- Look:

http://www.bbc.com/news/business-38600012

Now, is Fiat/Chrysler now considered a foreign manufacturer?

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Unhappy

PR FTW!

“Volkswagen deeply regrets the behavior that gave rise to the diesel crisis,” said CEO Matthias Müller. “The agreements that we have reached with the US government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear. They are an important step forward for our company and all our employees.”

Maybe I'm getting terminally cynical but that sounds so false and hollow as to be laughable.

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Re: PR FTW!

"values Volkswagen holds so dear"

That would be "Don't get caught."

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Re: PR FTW!

I don't think you're getting cynical Magani, you might just be a realist.

Also, if those guys decide they don't want to be sent to Uncle Sam's jail, they won't be, as it is beyond belief that they won't have copies of the emails they sent the board (or at least the next person above them in the hierarchy) warning that what they were doing was illegal.

VW are obviously quite happy for some middle ranking boffins to take a fall, but just like the banks, the directors will be untouchable.

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Joke

Re: PR FTW!

That would be "Don't get caught."

No, that's the motto of Parliament.

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I'm imagining

hand over the microphone

a glance off stage into the wings

mouthing of "where the fuck were our lobbyists?"

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Re: PR FTW!

>That would be "Don't get caught."

>No, that's the motto of Parliament.

And Google.

And El-Cheeto-Presidente

And so on...

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Anonymous Coward

Remind me again...

How many bankers went to jail for mortgage fraud? Yeah, thought so.

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Holmes

Re: Remind me again...

If you simply search the internet for the answer to your question, you'll find that it's 35. Maybe that's pitifully few, but it's more than zero.

http://money.cnn.com/2016/04/28/news/companies/bankers-prison/

"The idea that no bankers went to prison for crimes related to the financial crisis is a myth, according to the watchdog overseeing the federal government's bailout fund. There have been 35 bankers sentenced to prison, said Christy Goldsmith Romero, the special inspector general for the Troubled Assets Relief Program (SIGTARP), in a report to Congress released Thursday."

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Anonymous Coward

Re: Remind me again...

http://money.cnn.com/2016/04/28/news/companies/bankers-prison/

Did you read the article? This is for the fraud committed AFTER the bailout funds were released to cover all the fraud that led up to the crisis in the first place. So again, remind how many bankers writing fraudulent mortgages actually went to jail.

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Holmes

"Faceless" Uncle Sam sounds particularly pissed

A good time to review what went down:

Mettle Fatigue: VW’s Single-Point-of-Failure Ethics

Roland L. Trope, Trope and Schramm LLP

Eugene K. Ressler, US Military Academy Emeritus Faculty

After a year of denials, Volkswagen admitted in September 2015 that multiple makes and models of its diesel vehicles contained defeat device software. The decisions leading to “Dieselgate” involved a corruption of engineering ethics that the profession ought to address.

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I wonder how the higher ups avoided the blame?

Surely the ones being indicted would give up the names of those C level execs and board members who approved this scheme? Are they getting paid off, or will VW secretly pay for some high priced lawyers to get them off, or give them $5 million in exchange for keeping quiet and serving a few years in a country club prison?

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Re: I wonder how the higher ups avoided the blame?

From the article: The US wants to prosecute these men, none of whom are members of Volkswagen’s management board, in its own courts. They are mid-level engine development and quality management techies

Another straightforward case of "deputy heads will roll..."

Surely the ones being indicted would give up the names of those C level execs and board members who approved this scheme?

We can always hope: might just be worth stocking up on popcorn.

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Re: I wonder how the higher ups avoided the blame?

They probably cut a deal with Uncle Sam, hence the large fine.

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Where does the $4.3e9 go?

Not to the people who were actually hurt (the owners of the vehicles) that's for sure. That much moola becomes a nice line item in the budget on the income side.

Oh, well.

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Re: Where does the $4.3e9 go?

The Yanks will put it towards their $20tn debt.

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Re: Where does the $4.3e9 go?

HAHAHAHAHAHAHA [cough] [cough] [cough] [choke]...

Where to begin the comments on that one! Only in dreams will that money go towards any debt, or anything of value. How the crap do you think the debt happened to begin with? Certainly not by being responsible.

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Re: Where does the $4.3e9 go?

there's a pretty massive buyback/reimbursement program, but i'm not sure if it is part of this number specifically.

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Re: Where does the $4.3e9 go?

i'm not sure if it is part of this number specifically.

Completely separate. This hit is just US state bodies taking the opportunity to gouge a foreign corporation. Separate to that, there's the buy back, compensation, and modifications programmes (already estimated at $15bn), and separate again, the costs of handling and settling civil class actions brought by ambulance chasing lawyers (your guess of a number ending in "billion", I'd suggest $10bn wouldn't be unreasonable).

On that last one, as of October last year there were 190 class actions reported across 37 US states in respect of dieselgate. There's also VW's losses on sales, present and future. Dieselgate doesn't appear to have done much damage across the rest of World, but it does look as though it has caused damage to the US sales, and I suspect that will be a multi-year hit, that I'd guess at a further $1-2bn loss of gross profit. Plus any class action by shareholders - perhaps the same again. Then there's the consequent organisational change, higher compliance costs in future, difficulties with other countries' regulators looking for a piece of the action, maybe even legal action from separate companies and their investors whose shares went down because of dieselgate, like Daimler and BMW.

So all in, I'm guessing that the total cash cost to VW is going to work out around $40bn.

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Re: Where does the $4.3e9 go?

@Herby

It will pay CyberGulie to build a CyberWall!

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US of A - Galactic Jurisdiction?

I hope Germany tells the US to go swivel regarding the German individuals. They have form. I assume you can't be tried for the same offence twice across Germany and the US, so German justice will do nicely.

There was nothing directed at any particular country, just general cheating by VW. So the US has no reason to feel particularly affronted, but of course their courts do.

I have no hope German justice will prevail however, especially now.

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Re: US of A - Galactic Jurisdiction?

"There was nothing directed at any particular country, just general cheating by VW. So the US has no reason to feel particularly affronted, but of course their courts do."

The cheating was specifically targeted at the U.S. The vehicles sold in the U.S. are specifically made to comply with the EPA requirements and pass the unique EPA emissions tests.

Vehicles sold in California (and a few other places) have to pass both EPA tests and CARB tests. CARB requirements can be even more stringent, and variations are designed specifically for that market.

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Re: US of A - Galactic Jurisdiction?

There's actually a very simple way Germany can handle this, the same way that they protected the German doctor (Daniel Ubani) who worked in the UK without being able to speak English (thank you EU freedom of movement rules), and who killed a patient with an overdose of diamorphine (heroin)....they simply prosecute in Germany, and then hand out a token punishment. Result - we can't extradite him here for a proper punishment :-(

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Re: US of A - Galactic Jurisdiction?

It had hardly anything to do with a EU freedom of movement but with somebody being stupid enough employing a doctor not being able to speak English. (He was refused a position before due to his poor English skills and then someone stupid offered him a job that led to David Gray dying tragically)

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Anonymous Coward

I find it difficult to believe that the six staffers acted on their own without the direction and approval of VW's "higher ups"!

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@AC - They did not. Most likely it was mid to upper level manager who thought there was a loophole in the EPA regs (probably never actually read the mind numbing, barf inducing 'prose'). Had an engineering spec written around the dodgy interpretation which later became the basis of a software spec. I doubt the software group ever saw the regulations or the original (internal) engineering document.

EPA regulations (I have read some) are not known to be very clear, concise, or even correct ('when a solid waste is a liquid'). Couple this with getting the EPA to issue some sort of guidance and it is possible that someone unfamiliar with how the EPA works to read what they wanted in the regulations. Other government agencies have been known to laugh at the EPA's assault on the English language.

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Hope other techies will take their cue and do liberal CYA to protect them.

Unfortunately most of the orders will be in the form of boredroom meetings whose minutes can be conveniently "lost" if need be...

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" Most likely it was mid to upper level manager who thought there was a loophole in the EPA regs..."

...who of course may have been an idiot but certainly not stupid enough to approve anything _on record_ so good luck pinning anything on him...

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well done the us of a

As this is much worse than hsbc laundering money for the big drug cartels.

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Ru'
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Check out the youtube channel cccen - they have some great lectures on all this if you want to know real tech details.

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"investigation and prosecution of individuals responsible for these crimes"

That would be "investigation and prosecution of scapegoats responsible for these crimes", because the individuals responsible are all sitting way above the kerfluffle and the only thing they risk is a smaller bonus this year.

It is disgusting to see the continued immunity from prosecution of all high-level CxOs that have not outright murdered someone in public in front of a camera. It is high time the notion of judicial responsibility be applied to those raking in the money and touting their "management" as the reason for the financial success of their company.

If you take credit (and bonuses) for exceeding expectations, you should also be liable for the bumps caused by your "management".

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Angel

Re: "investigation and prosecution of individuals responsible for these crimes"

I won't be holding my breath, but at least few C-levels are under the bus for this, not the CEO, at least not yet, but he definitely feels the warmth of the coals other execs will be grilled over

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Holmes

We need a trial to find out what happened

Because at the moment we're all just speculating. Get it out into the open in a courtroom in front of a jury.

Was there really a specific moment when someone deliberately decided to do something wrong? Or was it just a chain of misunderstandings and incorrect assumptions?

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Meanwhile P-E Trump want's to leave the United Nations Framework Convention on Climate Change and not implement the Paris agreement - does that mean they'll give the money back if they do ?

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Maybe Germany can respond by extraditing the directors of Goldman Sacs et al for fraudulently causing a global recession that did a fuck sight more damage than a (comparatively) few dirtier-than-expected diesels.

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VW will just launch an new brand in the US, Fancy Ultra Efficient Peoples Auto-mobiles

Plus the fact they make Audi, Skoda & Seat -all based on the same subframes/engines

Porsche, Bugatti and Lamborghini - most peoples dream cars

oh and MAN and Scania Trucks

And Ducati motorcycles - the fastest ones too

All of which the standard US citizen won't join with VW, so the VW marque might not sell in the US, but VW group will still make a killing

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Eh?

The crime here wasn't that they cheated on emissions standards, the crime here was that they *knowingly* did so at *such a scale* that was easy to quantify the negative impact to the health and well-being of the American public. This may come as a surprise but airborne pollutants are very capable of reducing your quality of life if not outright contributing directly to your passing. What are the odds that a *German* manager with *emissions* right in his job title is unaware of that?

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You can't have every country wanting to jail executives from another country.

I'm guessing Germany are dragging their feet. If Germany started a trial and imprisoned them, I guess the USA would leave them alone.

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