Judge approves $2.8B fine in Volkswagen emissions scandal

By Ed Adamczyk Contact the Author   |  April 21, 2017 at 12:35 PM
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April 21 (UPI) -- A federal judge finalized a settlement Friday in which Volkswagen will pay a $2.8 billion fine for building diesel engines with emissions test-cheating software.

U.S. District Judge Sean Cox accepted a plea agreement between the company and the Justice Department in Detroit. Volkswagen pleaded guilty to three felonies on March 10. Earlier, the company admitted it equipped more than 500,000 engines with software designed to provide low readings of greenhouse gas emissions while the engines were tested. In January it agreed to a $4.8 billion fine, comprised of the $2.8 criminal fine and a $1.5 billion civil fine.

Cox assigned Larry Thompson, former U.S. deputy attorney general, to independently monitor the company for three years. By imposing the fine and accepting Volkswagen's agreement to essentially be on probation for three years, Cox accepted the deal between the government and the company. Cox also rejected a motion to allow additional restitution to customers who bought the software-equipped vehicles, saying any claims had been dealt with in a 2016 consumer settlement. Volkswagen agreed to buy back or modify any vehicle involved.

"This is a case of deliberate massive fraud perpetrated by VW management," Cox said in court. "This case also involves a failure of the VW supervisory board, which is government, labor and shareholders."

The company set aside nearly $25 billion to deal with the scandal. It acknowledged that up to 9 million cars sold in Europe were equipped with the software, but argued it did not violate European Union laws. Volkswagen also rejected demands by customers for rebates or other payments.

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