Volkswagen pleads guilty in U.S. court in diesel emissions scandal

DETROIT Volkswagen AG (VOWG_p.DE) pleaded guilty on Friday to three felony counts as part of a $4.3 billion plea agreement reached with the Justice Department in January over the automaker’s massive diesel emissions scandal.

VW general counsel Manfred Doess made the plea on the company’s behalf after he said at a hearing in U.S. District Court in Detroit that he was authorized by the board of directors of VW to enter a guilty plea.

“Your honor, VW AG is pleading guilty to all three counts because it is guilty on all three counts,” Doess told the court.

U.S. District Judge Sean Cox accepted the guilty plea to conspiracy to commit fraud, obstruction of justice and entry of goods by false statement charges. Doess said the criminal acts occurred in Germany and United States.

Under the deal, VW agreed to sweeping reforms, new audits and oversight by an independent monitor for three years after admitting to installing secret software in 580,000 U.S. vehicles to enable it to beat emissions tests over a six-year period and emit up to 40 times legally allowable pollution.

An assistant U.S. attorney, John Neal, told the court that the emissions scheme “was a well thought-out, planned offense that went to the top of the organization.” He said VW could have faced $17 billion to $34 billion in fines under sentencing guidelines.

Volkswagen agreed to change the way it operates in the United States and other countries under the settlement. VW, the world’s largest automaker by sales, in January agreed to pay $4.3 billion in U.S. civil and criminal fines.

In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offer to buy back about 500,000 polluting U.S. vehicles.

The German automaker halted sales of diesel vehicles in late 2015 and has said it has no plans to resume sales of new U.S. diesels.

The Justice Department also charged seven current and former VW executives with crimes related to the scandal. One executive is in custody and awaiting trial and another pleaded guilty and agreed to cooperate. Five of the seven are believed to be in Germany and have not been arraigned.

German prosecutors are also investigating.

VW chairman Hans Dieter Poetsch said Monday the company expects to broaden disciplinary action beyond the two dozen employees it has already suspended.

As part of its U.S. emission settlements, VW agreed to spend nearly $3 billion to offset excess emissions and make $2 billion in investments in zero emission vehicle infrastructure and awareness programs over a decade.

(Writing by David Shepardson in Washington; Editing by Chizu Nomiyama and Bernadette Baum)