Veteran Volkswagen engineer charged in US emissions probe

WASHINGTON (BLOOMBERG) - A veteran Volkswagen engineer pleaded guilty to conspiring to defraud US regulators and customers, the first criminal charge in the Justice Department's year-long investigation into the company's rigging of federal air-pollution tests.

It's not clear whether the engineer, James Liang, who entered his plea in Detroit federal court on Friday, is cooperating with the investigation. That would increase pressure on higher-ranking officials of the Wolfsburg, Germany-based company.

Liang worked at Volkswagen for two decades, beginning in Germany and moving to the US in 2008 - two years after the government says the conspiracy began. He appeared in court with a translator.

He admitted to a single charge of conspiracy to commit fraud on U.S. regulators and customers and violating the Clean Air Act. He faces a maximum penalty of five years in prison when sentenced.

The U.S. is continuing its criminal inquiry into the company's manipulation of emissions systems in its diesel cars to meet federal standards. The company has already agreed to settlements that may total US$16.5 billion (S$22.2 billion) to get 482,000 emissions-cheating diesel cars off US roads.

Settlement talks in the criminal matter against the company could be resolved by the end of the year, according to two people familiar with the matter. Germany and South Korea are also conducting criminal probes of the company.

After VW admitted last September that it had systematically rigged environmental tests since 2009, it suspended several engineers for their involvement in the scheme. They included several managers whom an internal investigation found had turned a blind eye to the effort.

In June, the German carmaker agreed to spend US$15.3 billion to get a half million emissions-cheating diesel vehicles off US roads. It agreed to devote as much as US$10 billion to buy back affected models and compensate drivers. It also said it would pay US$2.7 billion to federal and California regulators to fund pollution-reduction projects, and give US$2 billion to be invested in clean technology.