Volkswagen executive sentenced to seven years jail over 'dieselgate'

VW has so far refused to pay out to drivers in the UK and in wider Europe, claiming it only broke the law in the US. Photo / 123RF

A former Volkswagen executive has been sentenced to seven years in jail and given a £300,000 ($591,648) fine after pleading guilty to helping the German carmaker cheat on diesel emissions tests.

The "dieselgate" scandal has cost Volkswagen as much as US$30 billion ($43.9b) in fines, buybacks and settlements since 2015 when it admitted fitting 11 million diesel vehicles worldwide with so-called defeat devices to suppress emissions of nitrogen oxide during tests. These allowed vehicles to cheat pollution tests.

However, Oliver Schmidt, a German national who headed up VW's environmental and engineering office in Michigan, is only the second person to receive jail time in the US for his role in the scheme, according to the Daily Telegraph.

The first was a company engineer, James Liang, who was handed only a 40-month jail term in August for conspiracy to defraud the US government and violating the clean air act. He is appealing this.

Schmidt had been looking to limit his own sentence to 40 months in jail, with court papers filed last week showing Schmidt had said he only learnt about the scheme in the summer of 2015, at the end of the scandal.

Former Volkswagen executive Oliver Schmidt. Photo / AP

However, US federal officials sought the maximum sentence of seven years, saying Schmidt had played a key part in concealing the scheme from regulators given that he held a "leadership role within VW".

"As a consequence of that role, he was literally in the room for important decisions during the height of the criminal scheme."

They had also argued that he encouraged "key engineers" at VW to destroy documents relating to the scandal.

While VW has agreed to pay compensation to drivers in the US caught up in the scandal, it has so far refused to pay out to drivers in the UK and in wider Europe, claiming it only broke the law in the US.

However, it was ordered to recall cars in the UK fitted with defeat devices, and in September said it had fixed 775,000 of the 1.15 million cars affected.

Volkswagen emissions scandal

What did VW do?

The company falsified emissions data on its diesel vehicles, pretending they were cleaner than they are.

How exactly...?

By installing a piece of software into computers on its cars that recognise when the car is being tested – a so-called "defeat device". This fine-tunes the engine's performance to limit nitrogen oxide emissions. When used on the road, the emissions levels shoot back up.

How widespread is the problem?

11 million cars worldwide had the software installed; 1.2 million of them were in the UK

Which models are involved?

The allegations, which have been admitted by VW, cover the Jetta, Beetle, Audi A3 and Golf models from 2009 to 2015 and the Passat in 2014 and 2015. Audi, Seat and Skoda cars are also affected, as well as VW vans. Some diesel and petrol vehicles also have "irregularities" around carbon dioxide emissions.

What happens next?

VW offered to fix affected models and started the recall in January 2016. It is facing investigations in over a dozen countries as well as lawsuits from motorists.

As of March 2017, the company had not reached a compensation agreement with British motorists and the transport minister was considering legal action against VW.

The EU Commission has named the UK among seven countries against which it will take legal action for their inadequate consumer protection regarding this scandal.