The DOJ announced today that engineer James Robert Liang pleaded guilty and entered a plea agreement to cooperate with the government’s investigation.
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In the plea agreement, it was detailed that in 1983 Liang started working as part of Volkswagen’s department of diesel development in Wolfsburg, Germany.
When they realized they could not design an engine that would adhere to the strict US emissions standards, while also delivering solid road performance, they then created and implemented so-called “defeat devices” – software that could recognize when cars were being tested “in order to cheat” the tests, according to court papers.
The government described a 10-year conspiracy begun by Volkswagen employees as soon as they realized they couldn’t meet new US emissions standards.
At one point, warranty claims related to emissions-control systems began to rise. Later, when confronted by regulators, they tried to cover up their actions. After the diesel auto emission scandals, price of used diesel vehicles from Volkswagen dropped by as much as 30 percent in the United States. Liang’s plea agreement provides that he will cooperate with the government in its ongoing investigation. As the head of the Diesel Competence unit in the US, he reported to Germany, prosecutors said.
James Liang, who has worked for VW since 1983 and was part of a team of engineers who developed a diesel engine, was charged in an indictment made public on Friday with conspiring to commit wire fraud and violating USA clean air laws. “That’s what makes me guilty”.
In its indictment of Liang, the government alleges that Volkswagen engineers realized nearly immediately that the company’s diesel engines would not meet US emissions standards.
The scandal blew up after an investigation found that many Volkswagen cars being sold in America had software in diesel engines that could detect when they were being tested. Of that, $2.0 billion will be used to promote the sale of zero-emissions vehicles, while $2.7 billion will go to remediation efforts meant to offset the added pollution caused by the VW engines.
“The guilty plea by Volkswagen engineer James Liang begs the question: will there be other indictments in the case?”
Liang and VW personnel also concealed the cheat software from CARB in a meeting just days later in El Monte, Calif., the indictment said.
Within VW, the cheating software was referred to as “cycle beating”, or “emissions tight” mode, among other terms, according to the indictment. In another email the next month, an unidentified employee wrote, “We need a story for this situation!”
Later, the employees received a group update saying that California was waiting for answers. After the court hearing, Liang’s lawyer, Daniel Nixon, said his client was “very remorseful”. The settlement did not preclude criminal charges. Germany and South Korea are also conducting criminal probes of the company. “We can not comment on this indictment”, the company said in a statement.
Liang admits that he and his co-conspirators carried on lying even after these initial inquiries. In cases brought against General Motors for ignition problems and Toyota for uncontrolled acceleration, no high-ranking executives were accused of wrongdoing in the U.S.
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In 2008, Liang moved to California to help launch Volkswagen’s “clean diesel” vehicle lineup. Owners with gasoline cars are not eligible to receive compensation.
