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Related: About this forumIAV GmbH to Pay $35 Million Criminal Fine in Guilty Plea for Its Role in Volkswagen AG Emissions Fra
https://www.justice.gov/opa/pr/iav-gmbh-pay-35-million-criminal-fine-guilty-plea-its-role-volkswagen-ag-emissions-fraudDepartment of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, December 18, 2018
IAV GmbH to Pay $35 Million Criminal Fine in Guilty Plea for Its Role in Volkswagen AG Emissions Fraud
IAV GmbH (IAV), a German company that engineers and designs automotive systems, has agreed to plead guilty to one criminal felony count and pay a $35 million criminal fine as a result of the companys role in a long-running scheme for Volkswagen AG (VW) to sell diesel vehicles in the United States by using a defeat device to cheat on U.S. vehicle emissions tests required by federal law.
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IAV is charged with and has agreed to plead guilty to one count of conspiracy to defraud the United States and VWs U.S. customers and to violate the Clean Air Act by misleading the EPA and U.S. customers about whether certain VW- and Audi-branded diesel vehicles complied with U.S. vehicle emissions standards. IAV and its co-conspirators knew the vehicles did not meet U.S. emissions standards, worked collaboratively to design, test, and implement cheating software to cheat the U.S. testing process, and IAV was aware the VW concealed material facts about its cheating from federal and state regulators and U.S. customers. Under the terms of the plea agreement, which must be accepted by the court, IAV will plead guilty to this crime, will serve probation for two years, will be under an independent corporate compliance monitor who will oversee the company for two years, and will fully cooperate in the Justice Departments ongoing investigation and prosecution of individuals responsible for these crimes. Pursuant to the U.S. Sentencing Guidelines, IAVs $35 million fine was set according to the companys inability to pay a higher fine amount without jeopardizing its continued viability. IAV is scheduled to appear for a change of plea hearing before the Honorable Sean F. Cox of the U.S. District Court for the Eastern District of Michigan on Jan. 18, 2019 at 9:30 a.m.
(snip)
According to the statement of facts that will be filed with the court in IAVs case, in 2006, VW engineers began to design a new diesel engine to meet stricter U.S. emissions standards that would take effect by model year 2007. This new engine would be the cornerstone of a new project to sell diesel vehicles in the United States that would be marketed to buyers as clean diesel. When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter standards for nitrogen oxides (Nox) and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat the U.S. emissions tests.
VW delegated certain tasks associated with designing its new Gen 1 diesel engine to IAV, including parts of software development, diesel development and exhaust after-treatment. In November 2006, a VW employee requested that an IAV employee assist in the design of defeat device software for use in the diesel engine. The IAV employee agreed to do so and prepared documentation for a software design change to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or it was being driven on the road under normal driving conditions. If the software detected that the vehicle was not being tested, the vehicles emissions control systems were reduced substantially, causing the vehicle to emit substantially higher NOx, sometimes 35 times higher than U.S. standards.
By at least 2008, an IAV manager knew the purpose of the defeat device software, instructed IAV employees to continue working on the project and directed IAV employees to route VWs requests regarding the defeat device software through him; the manager was involved in coordinating IAVs continued work on it.
Starting with the first model year (2009) of VWs new clean diesel Gen 1 engine, through model year 2014, IAV and its co-conspirators caused defeat device software to be installed on all of the approximately 335,000 Gen 1 vehicles that VW sold in the United States.
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