German prosecutors charge former VW CEO Winterkorn with fraud

German prosecutors charge former VW CEO Winterkorn with fraud

FRANKFURT/BERLIN (Reuters) – German prosecutors charged former Volkswagen boss Martin Winterkorn with fraud on Monday over his role in the carmaker’s manipulation of diesel emissions testing, more than three years after the scandal came to light.

FILE PHOTO: Former Volkswagen chief executive Martin Winterkorn leaves after testifying to a German parliamentary committee on the carmaker’s emissions scandal in Berlin, Germany, January 19, 2017. REUTERS/Hannibal Hanschke

The German case comes nearly a year after the United States filed criminal charges against Winterkorn, accusing him of conspiring to cover up the German carmaker’s diesel emissions test cheating.

The prosecutors office in the German city of Braunschweig said in a statement that Winterkorn and four other managers faced charges. It did not give the names of the other four or say whether they were still employed by Volkswagen.

A spokesman for Winterkorn did not immediately respond to a request for comment.

Volkswagen Chief Executive Herbert Diess, who only joined the carmaker in July 2015 and became CEO a year ago, said he was not among those charged.

“I am not among the accused. I do not expect to be charged,” Diess said on the sidelines of the Shanghai auto show.

Volkswagen admitted in September 2015 to having used illegal engine control software to cheat U.S. pollution tests, triggering a global backlash against diesel after the scandal that has so far cost the carmaker 29 billion euros ($32.8 billion).

Winterkorn resigned shortly after the scandal came to light, saying at the time he was stunned by the scale of misconduct.

Prosecutors said Winterkorn was accused of a particularly serious case of fraud, breach of trust and breaching competition laws because he had not acted – despite having a special responsibility to do so as the company’s CEO – after it became clear on May 25, 2014, that diesel engines had been manipulated.

He neglected to inform authorities in Europe and the United States as well as customers of the illegal software and he also did not prevent the continued installation of such software, the prosecutors said.

They added that this had resulted in Volkswagen being slapped with much higher fines in Germany and the United States than would have been the case had he acted.

Criminal proceedings against the carmaker over the rigged tests had already resulted in a one billion euro fine in June last year, marking one of the highest ever punitive payments imposed by German authorities against a company.

Volkswagen said it would not comment because the company was not a party to the proceedings against individuals and that the Braunschweig criminal case against the company itself had been closed.

Winterkorn remains in Germany, which does not typically extradite its citizens for prosecution in U.S. courts.

In a related case, the U.S. Securities and Exchange Commission (SEC) sued Winterkorn last month, saying U.S. investors were informed too late about the Volkswagen diesel emissions scandal, alleging “massive fraud”.

The Braunschweig prosecutors said people accused of particularly serious fraud could face up to 10 years in prison in Germany.

They said investigations into another 36 suspects in the diesel emissions scandal were ongoing and it was unclear when they would be wrapped up.

Reporting by Ludwig Burger; Additional reporting by Tassilo Hummel in Berlin, Jan Schwartz in Hamburg and Edward Taylor in Shanghai; Writing by Michelle Martin and Ludwig Burger; Editing by Tassilo Hummel and Susan Fenton

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