Volkswagen Cheated Public, Reaches Agreement to Compensate Owners of Diesel Vehicles

Volkswagen (VW) has reached an agreement with the US government to spend more than one billion dollars to compensate owners of diesel cars that cheat on emissions tests. The agreement calls for VW to buy back up to 480,000 diesel cars in the United States. The vehicles were found to be equipped with illegal emissions software that circumvented Environmental Protection Agency (EPA) standards for air pollutants.

The illegal software, commonly referred to as a “defeat device,” enabled the cars to cheat emissions tests by reducing exhaust settings during the testing process. When the test was over and the car was back on the roadway, the engine would return to its normal settings, resulting in the emission of nitrogen oxides at 40 times the legal limit in the U.S.

Now VW has taken a step toward resolving its legal troubles by reaching a civil settlement with the U.S. government. However, the settlement, which was announced in a federal court, doesn’t immediately solve all of the issues in the case. For example, VW is still negotiating with the federal government over exactly how much money the auto manufacturer will pay in fines and compensation to vehicle owners. At a minimum, VW is going to have to raise the amount of money that it plans to spend to cover the costs of compensating owners of the company’s diesel cars.

Kelley Blue Book, a vehicle valuation and automotive research company, estimated that VW would need at least $7 billion in order to buy back and repair all the diesel cars sold in the U.S. On top of that, the federal government is expected to levy fines totaling billions of dollars, as well. (The maximum fine allowed under current federal guidelines is $18 billion.)

The U.S. District Court judge said that June 21 is the hard deadline for VW to resolve the outstanding financial issues in the case. The judge noted that VW has already had seven months to get the vehicles off U.S. roads so that they no longer emit unacceptable levels of pollutants.

Did Volkswagen Really Care?

Although Volkswagen ultimately admitted to rigging the company’s diesel-powered vehicles to get around emissions requirements on pollution tests, this admission came only after scientists at a lab in West Virginia conducted road tests on the vehicles’ two-liter diesel engines and found that none of the VW cars met U.S. emissions standards. In fact, for years now, VW has been putting its own profits ahead of environmental concerns by marketing its diesel cars as fuel-efficient alternatives to other company’s vehicles.

In a recent statement, VW declared that it “intends to compensate its customers fully and to remediate any impact on the environment from excess diesel emissions.” The statement, as well as VW’s generic plan to invest in clean technologies going forward, rings hollow, however, in light of the fact that VW has yet to come up with a sound strategy for compensating the owners of VW diesel-powered cars that were sold globally. This is particularly troubling because there are currently more than 10 million VW diesel vehicles polluting the environment in Europe. Although VW has issued product recalls in several countries, owners of VW cars rigged to cheat emissions tests in Europe have no way of getting compensated.

Additionally, VW’s expressed concern for the environment comes across as disingenuous since the company has focused primarily on dealing with the matter only in the United States, where environmental laws are stricter than in Europe. The possibility of severe penalties, as well as potential criminal charges being brought by the U.S. Justice Department, likely had a lot do with VW’s supposed interest in “making things right” for U.S. vehicle owners.

For additional information, view the New York Times article, “Volkswagen Reaches Deal in U.S. Over Emissions Scandal.”

If you know of fraud being perpetrated against the federal government or the state government, whether it involves Medicare fraud, Medicaid fraud or any other kind of fraud, you could be entitled to a significant financial reward. Contact the experienced whistleblower and qui tam attorneys at Begelman & Orlow, P. C. today to discuss your options.