US charges ex-Audi manager in emissions cheating case

An Audi Q2 car is shown under a giant logo at a dealership in Barcelona.
An Audi Q2 car is shown under a giant logo at a dealership in Barcelona. PHOTO: REUTERS

WASHINGTON (Reuters) - The US Justice Department on Thursday (July 6) said it has charged a former Audi manager with directing employees at the company, a division of Volkswagen AG, to design software to cheat US emissions tests in thousands of Audi diesel cars.

Giovanni Pamio, an Italian citizen, was charged with conspiracy to defraud the United States, wire fraud, and violation of the Clean Air Act, the Justice Department said in a news release.

The complaint released Thursday evening says US authorities had help from an unidentified Audi employee who works in the German luxury brand's diesel engine development department. The witness is cooperating with US authorities, and in return US authorities have agreed not prosecute the person.

The criminal complaint describes a series of exchanges across a period of at least seven years in which certain Audi engineers warned that the pollution control systems being used on the brand's diesel engines violated US clean air rules.

US prosecutors charge in their complaint that Pamio ignored or suppressed those warnings, and ordered subordinates to send false information to American regulators stating that the Audi diesels did not contain systems designed to defeat federal clean air tests.

The complaint says that in October 2013, Pamio ordered his subordinates to prepare a presentation for a "then-senior executive and member of Audi's brand management board"describing in detail the technology used to limit an engine's consumption of a urea formula designed to scrub pollutants from the exhaust. The presentation covered "the function's problematic characteristics," the complaint states.

VW in September 2015 admitted using sophisticated secret software in its cars to cheat exhaust emissions tests and pleaded guilty in March in a US court to three felonies in connection with the scandal.

Volkswagen has agreed to spend as much as US$25 billion in the United States to resolve claims from owners and regulators over polluting diesel vehicles and has offered to buy back about 500,000 vehicles.

However, US authorities are continuing their investigation of actions of individual Volkswagen employees, and have previously indicted seven former or current company executives in connection with cheating on emissions tests.

James Liang, a VW employee who pleaded guilty to misleading regulators, is cooperating with prosecutors. Oliver Schmidt, former chief of Volkswagen's environmental and engineering operation in Michigan, is awaiting trial.