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Top Volkswagen executives named in N.Y., Mass., emission fraud lawsuits

By Allen Cone
Top Volkswagen executives named in N.Y., Mass., emission fraud lawsuits
Volkswagen is being sued by the attorneys general in New York and Massachusetts for "massive fraud" that included two top executive. File Photo by Brian Kersey/UPI

NEW YORK, July 19 (UPI) -- High-ranking Volkswagen executives spearheaded "massive fraud" for more than a decade to intentionally sell diesel cars that violated emission regulations, attorneys general in New York and Massachusetts allege in lawsuits filed Tuesday.

Volkswagen, which admitted in September that 11 million vehicles worldwide and 500,000 in the United States were equipped with software to cheat emissions tests, has said the deception was limited to a small group and top management was not aware of the problem.

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But the new civil suit by the two states allege the deception reached top levels of the German automaker.

Martin Winterkorn, the CEO of Volkswagen who resigned shortly after the scandal became public, is identified in the suit. Also named is Volkswagen's current chief executive, Matthias Müller, who replaced Winterkorn and was head of project management at Audi, which is Volkswagen's luxury brand.

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The decision to manipulate tests dates to 1999, when engineers at the company's Audi luxury unit developed technology to quiet diesel vehicles, according to the 84-page lawsuit filed in New York. The technology was put in cars in 2004 but it made vehicles exceed European emissions standards. Engineers added a software "acoustic function" to turn it off during emissions tests, the lawsuit said.

The suit alleges that Volkswagen tried to continue covering the violations when regulators first raised questions, and only admitted to the wrongdoing when shown in undisputable facts.

"The allegations against Volkswagen, Audi and Porsche reveal a culture of deeply rooted corporate arrogance, combined with a conscious disregard for the rule of law or the protection of public health and the environment," Eric T. Schneiderman, the New York attorney general, said in a statement.

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Last month Volkswagen agreed to a $14.7 billion settlement with regulators and state attorneys general as compensation for U.S. car owners, repairing cars to lower emissions and paying environmental fines.

"Today's lawsuits make clear that substantial penalties must be imposed on the Volkswagen companies, above and beyond the amount they have to pay to make American consumers whole," Schneiderman said. "Neither Volkswagen, nor any other car manufacturer, should ever again conclude that it can engage in this behavior as part of the cost of doing business."

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The New York suit seeks civil penalties up to $450 million.

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The Massachusetts lawsuit seeks $25,000 for each day that the automaker violated state environmental laws from 2009 to 2016. That would amount to $73 million in the state alone.

Additional states could join in the suit. Maryland plans to file a lawsuit Wednesday, according to Attorney General Brian E. Frosh.

Volkswagen, in a statement, said it has addressed many of the allegations in its $14.7 billion settlement.

"It is regrettable that some states have decided to sue for environmental claims now," she said," the statement said.

Maura Healey, the Massachusetts attorney general, said in a statement that Volkswagen "polluted our air, and damaged our environment and then, to make matters worse, plotted a massive coverup."

The New York attorney general says more than two dozen Volkswagen engineers and managers were involved in the deception.

The New York suit also criticized Volkswagen's supervisory board for awarding about $70 million in salary and bonuses to Müller and other members of the management board last year.

"Recent actions demonstrate that the company's culture that incentivizes cheating and denies accountability comes from the very top and, even now, remains unchecked," the suit says.

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The company also faces criminal investigations and shareholder lawsuits worldwide. The U.S. Justice Department said it was still pursuing a criminal investigation after announcing the civil agreement.

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