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4 Audi Managers Were Indicted by a Federal Grand Jury in an Emissions Cheating Case

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Four Audi officials have been indicted by the U.S. for their roles in a nearly 10-year long conspiracy to defraud American customers and regulators by rigging vehicles with illegal software to pass emissions tests. The charges were handed down Thursday by a federal grand jury in Detroit.

The four are: Richard Bauder, who led Audi’s diesel engine development department from 2002 to 2012; Axel Eiser, who oversaw that department and also headed the Volkswagen AG unit’s engine development division; Stefan Knirsch, who led that division after Eiser; and the carmaker’s former head of engine registration, Carsten Nagel.

They’re accused of conspiring with an already-indicted former Audi executive, Giovanni Pamio, to defraud the U.S., commit wire fraud and violate the Clean Air Act to enrich Volkswagen and themselves. According to the filing, they sought to deceive regulators to obtain emissions certificates required in the U.S. for so-called “clean diesel” models, and then selling those vehicles knowing they were designed to evade the law.

The indictments cast the Audi brand in a negative light weeks after Volkswagen’s luxury-car unit posted its first annual U.S. sales drop since 2009. A long streak of monthly gains ended with steep declines in November and December, dragging the division to a 1.4 percent decrease for 2018.

Audi, Volkswagen’s biggest profit contributor, has trailed behind rivals Mercedes-Benz and BMW AG in recent years. It’s been overhauling its lineup to narrow the gap in sales volumes and margins.

The fresh charges show that U.S. prosecutors continue to pursue their criminal case against the German carmaker more than three years after the U.S. environmental regulators first accused Volkswagen of rigging hundreds of thousands of diesel-powered cars with illegal software to cheat on emissions tests.

None of the men charged Thursday are in custody and no court appearances are scheduled according to federal prosecutors in Detroit.

“We continue to cooperate with investigations by the Department of Justice into the conduct of individuals. It would not be appropriate to comment on individual cases,” Volkswagen spokesman Pietro Zollino said in an email.

The U.S. has already indicted eight individuals for their role in Volkswagen’s emissions-cheating scheme, including former Chief Executive Officer Martin Winterkorn. Most have remained in Germany, which won’t extradite its citizens.

A German probe over the diesel-emission cheating resulted in the arrest of Audi’s former Chief Executive Officer Rupert Stadler last year. Stadler was held in jail for four months before being released in October by judges who said there’s still strong evidence against him in the case.

Stadler was the highest-profile executive detained since the diesel-cheating scandal engulfed Volkswagen more than three years ago. Throughout the crisis, as sanctions topped 27 billion euros ($31 billion), Volkswagen rejected claims that senior managers such as Stadler were aware of the criminal scheme.

Pamio was charged in a U.S. criminal complaint filed in July 2017 with conspiracy to defraud the U.S., wire fraud and violations of the U.S. Clean Air Act. Federal prosecutors said he was “legally responsible” for cheating software on 63,966 model year 2009-2016 vehicles sold in the U.S. for the model years 2009 to 2016.

The models involved in the latest indictment include the 2009-15 Volkswagen Touareg sport utility vehicle, 2009-15 Audi Q7, 2014-15 Audi A6 Quattro and A7 Quattro.

The case is U.S. v. Bauder, 19-cr-20033, U.S. District Court, Eastern District of Michigan (Detroit).

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