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The Courts Transportation Crime

Volkswagen Executive Faces Jail Time After Guilty Plea (arstechnica.com) 135

An anonymous reader quotes Ars Technica: A former Volkswagen executive has pleaded guilty to two charges related to the company's diesel emissions scandal. He is the second VW Group employee to do so, following retired engineer James Liang pleading guilty last summer. The VW Group executive, Oliver Schmidt, was based outside of Detroit and was in charge of emissions compliance for Volkswagen in the years before the company was caught using illegal software to cheat on federal emissions tests.

Schmidt, a German citizen who was 48 when he was arrested in Miami in January on vacation, was originally charged with 11 felony counts. In accepting a plea deal from US federal officials, Schmidt will only plead guilty to two charges: conspiracy to defraud the US government and violate the Clean Air Act, and making a false statement under the Clean Air Act. Schmidt will be sentenced in December. He could face up to seven years in prison, as well as fines from $40,000 to $400,000, according to the plea agreement. After that, Schmidt could also be required to serve four years of supervised release.

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Volkswagen Executive Faces Jail Time After Guilty Plea

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  • by SilverBlade2k ( 1005695 ) on Saturday August 05, 2017 @04:48PM (#54948149)

    A better punishment would be to punish the company as a whole:

    - Force Volkswagaon to buy back all of the affected vehicles - at their original value, regardless of how old it is.
    - Give every customer of an effected car, at minimum, $5000 extra for the inconvenience and deception.
    - Every new car off the assembly line must an electric vehicle AND to be sold at the same price as a similar gas powered car. Even if it is at a loss.

    Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

    • by Anonymous Coward

      I don't want an EV.

      • I don't want an EV.

        All VWs will be electrified soon, and lots of them will be EVs. VW is spending a bunch of money on a charging network in North America, which should boost EV adoption considerably. Of course, it doesn't take big numbers to get a big increase in the market right now. It's not their choice, but they're going to do it anyway.

        It's going to be hard to find a car which is not a mild hybrid soon, because the cost difference is diminishing and the emissions benefits are substantial.

        • I don't want an EV.

          In Germany . . . owning an EV will turn out to be a major pain in the ass . . . where do you charge it . . . ?

          Lots of folks here live in rented apartments, where charging facilities just don't plain exist . . .

          • EVs will continue to remain relatively niche vehicles for some years, but it will very soon be difficult to find a car which is not some kind of hybrid. And while I am constantly harping on about the impending proliferation of mild hybrids, you can expect to see them all become more common. On the other hand, there are actually large markets full of people who put down just about the right number of miles who are prime for EV ownership: commuters. In the USA they are mostly Californians, but there are also

            • . . . until I can not plug it in to a socket to charge it . . . it ain't gonna work . . .

              Give me EV charging stations, like gas stations, and I will be with you!

          • where do you charge it . . . ?

            Public parking spaces with chargers already exist and are becoming more common. There are several within a 5 minute walk of my home. There are chargers at my local Walmart, Costco, and Safeway. My employer also provides a few EV parking spaces, and will be installing more.

            • Oh and Walmart, Costco and Safeway don't mind if the fella who lives in the apartment down the street parks there and charges? Generally they expect a little business for the right to charge. Now you're talking about plugging in there and then feeling responsible to use the business that you may not normally used. No thanks, I'll take the gas station across the street for five minutes, pay, and done.
              • Oh and Walmart, Costco and Safeway don't mind if the fella who lives in the apartment down the street parks there and charges?

                The chargers are not free. You plug in, a sensor identifies your car, and your account is debited for the amount of energy you draw.

              • I only have a 12 gallon tank and it's not possible for me to get in and out of a gas station in under 10 minutes.

                Also, new charging technology is in production that brings a 25% charge down to 5 minutes and an 80% charge down to 15 minutes.

                As the percentage of EV's increase and ICE's decrease, gasoline will become more expensive (because the overhead remains the same and less gallons are produced, delivered, and pumped).

                Automobiles replaced horses extremely quickly. It's likely EV's will similarly hit a ti

          • I don't want an EV.

            In Germany . . . owning an EV will turn out to be a major pain in the ass . . . where do you charge it . . . ?

            Lots of folks here live in rented apartments, where charging facilities just don't plain exist . . .

            Truly an insurmountable problem with no solutions possible.

            • Correct. Even the plugs are different. I have no idea how anyone thought this could be an option. Tsh!
              • Correct. Even the plugs are different. I have no idea how anyone thought this could be an option. Tsh!

                And dropping my sarcasm, for the fellow that thought this would be a big pain in the ass, even here in the US, where almost everything is too hard these days, what is happening is businesses and hotels are installing charge ports. The concept is you don't draw the batteries down so far that they need a full recharge. When you are in town, you have a charging port at home. You might even have a solar powered charger. Then you do your daily travels, maybe charge it some at work, come home and finish a charge

        • im glad i dont own vw stock.
      • Nobody wanted horseless carriages a while back either, but yet here we are.
        • Nobody wanted horseless carriages a while back either, but yet here we are.

          Where ever you go . . . there you are!"

          Google that quote, to see where it came from!

      • I don't want an EV.

        Well for god's sake, don't buy one!

    • by Anonymous Coward


      Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

      Don't make me laugh. Companies get fined all the time, and it doesn't change behavior. They go back to doing illegal things. It's largely because companies don't act, individuals do. When punished the individuals who acted don't lose money, the stockholders do.

      If all that can happen is maybe you lose your job (and normally not even that) if you get caught, no big deal. Most of the time pe

      • by Anonymous Coward

        It's largely because companies don't act, individuals do. When punished the individuals who acted don't lose money, the stockholders do.

    • by hord ( 5016115 )

      So you want to solve an emissions scandle by digging up more metal, oil, and rare earths? Every study I've ever read says that whatever you save by switching to an EV is completely overshadowed by the industrial waste that was produced in making it. I mean, I guess if we throw everything away once it's probably ok. I hope we don't have to throw all of gen-2 away...

      • Every study I've ever read says ...

        Vacuously true?

      • by Rei ( 128717 )

        Every study I've ever read says

        And in what journal were those zero studies published? Because I've read plenty of actual, peer-reviewed studies, which say exactly the opposite. Which should be patently obvious to anyone who takes half a second to think about it. A typical gasoline car burns its weight in gasoline every year, up in smoke. And the mass of a car gets largely recycled at end-of-life. The more valuable the material in a car, the more likely it is to be recycled.

        Oh, and as for the whole "rare

        • About 1/3 of the average car's lifetime energy consumption is spent in production. For EVs, that's probably as high as 1/2. Maybe Tesla can get it back down to 1/3, but they're not going to get far beyond that.

          • by Rei ( 128717 )

            Simply not true. Here's [rsc.org] one of the most recent studies on the topic. Check out figure 5a. The blue and light purple at the bottom of the graph represent energy consumption in usage. The colours above that represent energy consumption in production. Of those colours on EVs, the light blue at the top only applies to small-volume battery production; for high volume battery production (e.g. gigafactories), only the green and dark purple apply. Note how similar they are to ICE energy consumption, and how small

    • ... to let the responsible VW executives breathe the lovely fumes from their oh-so-clean Diesels. I'm sure they could modify some VW Diesel for this [deathcamps.org].
    • Those are the kind of things that won't make a company change its practices, only retreat further into finding new ways to hide cheating software while simultaneously not helping the people who get cars (VW was hardly the only car manufacturer to engage in this cheating).

      Freeing the car software by distributing complete source code and build/install instructions under a free software license plus making cars that use the same or compatible software would help the car owner far more. This is entirely reasona

      • Freeing the car software by distributing complete source code and build/install instructions under a free software license plus making cars that use the same or compatible software would help the car owner far more.

        This begs the question, will a car user actually derive more benefit from open source than they would from strong emissions standards? And the answer is obviously a resounding what the fuck are you, insane? The average person not only doesn't give a shit if they poison their neighbor, but also doesn't know which end of a wrench is which. Open source cars would do them zero good, since the cost of an Alldata subscription is a tiny portion of the costs of an automotive repair shop.

        Software freedom (respecting a computer user's freedoms to run, share, and modify software at any time for any reason even commercially) is valuable for its own sake and the car manufacturers know it. That's why they're willing to pay some money or send a small number of people to jail now. Those steps protect their ability to cheat again leveraging the power of proprietary software (user-subjugating software) when they think they can get away with it.

        The car companies are not se

    • A better punishment would be to punish the company as a whole:

      Nah - if a few CEO's get to spend some time in jail, and if others know this can happen to them, it won't take long at all for companies to have wonderful ethics.

      Otherwise, he just gets to shrug his shoulders and lament about that custodian that "caused" the whole problem.

      I'd love to see one of these turds get a life sentence. Problem cured in a minute.

      • by rtb61 ( 674572 )

        The only way you can pursue those cases up the chain of command is by giving ones lower in the chain extended custodial sentences if they do no cooperate in pursuing those up the chain, not to have their sentence eliminated, just reduced. It really is kind of unfair to penalised investors who have zero involvement in the bonus pumping scam but you also don't want companies full of pigeons who do nothing but take legal blame for everything that goes wrong, whilst major investors pull the strings, you really

        • It really is kind of unfair to penalised investors who have zero involvement in the bonus pumping scam

          Nope. The investors supply the economic power. They are responsible, so it's absolutely fair. Don't like it? The simple remedy is to make an effort to invest your money ethically. Just handing it to big corporations doesn't fit the bill there.

          • It really is kind of unfair to penalised investors who have zero involvement in the bonus pumping scam

            Nope. The investors supply the economic power. They are responsible, so it's absolutely fair. Don't like it? The simple remedy is to make an effort to invest your money ethically. Just handing it to big corporations doesn't fit the bill there.

            Exactly. We are reminded on a daily basis that corporations are amoral, and geared toward making profit, and nothing else. That sounds a lot like a recipe for selling heroin and cocaine, and murdering your competition. Servicing the stockholders, you know. And dare I mention that we live in an age where the stockholders can even be serviced nicely when the fine doesn't approach the profit? Cost of doing business, perhaps.

            But let's back away from that slippery but illustrative slope for a moment.

            If the

    • Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

      All this does is punish the shareholders and employees of the company who will lose their investment and their job respectively when the company goes bankrupt. The overwhelming majority of these people are not responsible for the crime committed. Putting the executives and employees who were responsible for the decision in jail as well as huge fines ($400k seems small given the likely salary of the executive) holds them accountable for the decisions which they are responsible for.

      The more punishments li

    • Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

      No. This is useless and false, and does nothing to deter future crimes. Megacompanies think nothing of paying a slap-on-the-wrist fine as they merely see it as the cost of doing business. The deal as it stands is much better as long as the executives actually go to PMIA prison

      This is the first time (in a very, very long while) that I have seen a notable example of a white collar criminal doing hard time. The reason why it's so important is that boardroom executives need to see that there is a very real cons

    • at their original value

      That makes no sense. Cars have changed hands. Cars have been written off. Cars have had all their value extracted from over use. Some cars have stayed in garages and are still at the original value.

      Your proposal unfairly distributes fines to people unequally. Better to just fine them a fixed fee that goes to the government and benefits the people who were affected (drivers of VWs are just a small portion of the people affected by pollution of VWs).

      AND to be sold at the same price as a similar gas powered car. Even if it is at a loss.

      Not legal. Not even against a company you don't like.

    • Making the company bleed quite a bit is what happened up to now. What you propose would kill it. Now whether you want to kill it may be up your objective, but keep in mind that 99% of the people working there had nothing to do with the scandal, it was mostly executive and engineer. That is why personally I am against punishing companies that far, I am on the other hand for punishing executive and other people doing the illegal action that far, with possibly *consecutive* penalty rather than parallel.
    • by mspohr ( 589790 )

      California has been able to force VW to do much of your agenda.
      - Forced VW to buy back the diesel cars at pre-scandal prices
      - Forced VW to pay extra compensation to owners
      - Forced VW to spend $800 million dollars to build an EV charging network in California
      VW will be making EVs to use the charging network.
      https://www.arb.ca.gov/msprog/... [ca.gov]

    • with a singular hive mind. There are bad people at VW who want to cheat, and there are good people at VW who want to do the right thing. We could institute your punishment and basically force the company into bankruptcy, punishing the good people along with the bad. The good people would have to find new jobs at other companies, if they can, and suffer financial burden while they're searching. But more crucially the bad people would scatter to other companies, free to try to cheat again in other industr
      • Give every customer of an effected car, at minimum, $5000 extra for the inconvenience and deception.
      • Every new car off the assembly line must an electric vehicle AND to be sold at the same price as a similar gas powered car. Even if it is at a loss.

      That's ridiculous, it will not bleed the company, it will bankrupt it. Moreover, all industry will pack up and move to other countries. You didn't think VW is the only one, did you?

      The top of the executives needs to be jailed hard time, Germany knows a strong

    • Every new car off the assembly line must an electric vehicle

      Of course, because dictating what kind of new Volkswagen customers are allowed to purchase should definitely be part of the "company's punishment."

      Hint: the "company" is a fictional entity created for wealth-sharing purposes; the only thing worth doing is to look past it and give the corporate veil a proper fucking piercing; those actually responsible (not this patsy) need an ass-fucking Fed-style.

    • by hashish ( 62254 )

      No, this is not a better punishment as it punishes the shareholder not the perpetrator.

  • by PolygamousRanchKid ( 1290638 ) on Saturday August 05, 2017 @04:49PM (#54948153)

    . . . jail is for poor folks . . . as every American Kid says during the morning roll call:

    With freedom and justice . . . for the rich . . .

  • [awa2lksa.com] [awa2lksa.com]
  • by 140Mandak262Jamuna ( 970587 ) on Saturday August 05, 2017 @04:58PM (#54948175) Journal
    He is probably the lowest level flunky who would still be high enough for PR spin. He will probably be well rewarded for protecting the higher ups who were all in the game.

    It is a German company we are talking about. Their level of documentation and verification are phenomenal. Anyone who sold software to VW would know. They store all the results of all the prior use of the software that was used. They rerun the software after every version upgrade. And they demand every difference to be explained.

    No way this diesel emission scandal is some handywork of some rogue group or division. Everyone from the very top knew, they approved and they monitored the deception from the get go.

    • He is probably the lowest level flunky who would still be high enough for PR spin.

      Actually, it sounded more like he was the only one they could get their hands on quickly. I suspect that others may well be the subject of extradition requests or at least they are now going to have far more restricted travel itineraries since they will have to avoid everywhere which has a suitable extradition treaty...and that's assuming that local EU authorities don't end up throwing them in jail first for the same crime.

  • Schmidt, a German citizen who was 48 when he was arrested in Miami in January on vacation...

    Arrested him on vacation? You Germans are savages. Heh.

    I have to say, I kind of like the fact that members of industry are held accountable for the Company's actions. We have no like study to reference over here in the Americas.

    • by hord ( 5016115 )

      In Miami... probably by the US and I don't see anything about being extradited. So it is we in the Americas that are the savages?

      I can agree with holding executives accountable. Why only one, though? There should be a few more plus some board members and a whole chain of command.

      • by edjs ( 1043612 )

        The US indicted 6 VW execs for breaking US law. Schmidt had the misfortune of being in the US when the indictments came down. Presumably the other 5 are avoiding getting anywhere near US soil.

      • In Miami... probably by the US and I don't see anything about being extradited.

        No, he came of his own volition.

        So it is we in the Americas that are the savages?

        I can't prove this a negative, but now I'm in the unenviable position of profiling two different nationalities in one thread.

        I can agree with holding executives accountable. Why only one, though? There should be a few more plus some board members and a whole chain of command.

        What are you implying? We're too advanced to accept sacrifices?

  • by PopeRatzo ( 965947 ) on Saturday August 05, 2017 @05:05PM (#54948215) Journal

    Any time a corporate executive is jailed, for whatever reason, it's good for everyone.

    I subscribe to "broken windows theory" when it comes to corporate crime. If you let one get away with even a minor crime, the rest will think it's OK to do something a little bigger, until we end up with what we've got now.

    Better to make an example of a few executives. Don't put them in any country club prison, either. Use public stocks, heads on pikes, I don't care. Just let them know they are not the masters of the universe.

  • He committed the most grievous of sins, he cost everybody a lot of money when he got caught.
  • by BarneyGuarder ( 44042 ) on Saturday August 05, 2017 @05:16PM (#54948261)

    Those guys never do time

    • Those guys never do time

      I very nearly said the same thing in my comment....

    • Or committed a bigger crime. Maybe it's not finance but just the magnitude of their crimes that lets them get away with it.

      Of course it could just be the whole German company thing. If it was Ford or GM would the US government really be going after the execs with as much energy?

    • It wasn't that; VW screwed with the government, THAT is why they are being punished so harshly. Had they just cheated, bankrupted, lied to, and ripped off their customers by the millions, nobody would be going to jail and the worst outcome would be a tiny fine.
    • Those guys never do time

      There was only one bank which ended up getting prosecuted for the '08 mortgage crisis. A tiny Chinatown family-owned bank that discovered one of their loan officers taking bribes and making fraudulent mortgage applications. The managers of the bank promptly reported him to regulators -- for which the managers were indicted, with the fraudulent loan officer becoming the star witness for the prosecution against the bank.

      http://www.npr.org/2017/05/18/... [npr.org]
      "As it happens, Abacus didn't deal in subprime. The Chi

  • Oh come on... (Score:4, Insightful)

    by WolfgangVL ( 3494585 ) on Saturday August 05, 2017 @05:27PM (#54948301)

    This guy is not going to prison. He's gonna pay a big fine. That's all.

    If on the off chance that he does go to prison, he's gonna go to country-club prison and probably collect his entire salary as hush money when he gets out anyway.

    If any of this was real, it would be for more than the one guy who happened to be on vacation in the US when they decided to make an example.

    I don't buy this theater for a second.

    • If on the off chance that he does go to prison, he's gonna go to country-club prison and probably collect his entire salary as hush money when he gets out anyway.

      Country club prison is still prison. This guy will lose the lifestyle he's used to. He'll eat shitty food when told to. He'll sleep when told to. He'll wear shitty clothes, and let outside whenever the guards decide he can go outside. Library privileges will be limited. TV is limited. Phone calls are limited. Internet? Yeah, about that. Cell phone? More prison time if caught.

      If you live in the ghetto country club prison may be no big deal. Make a 6-7 figure salary? I'm pretty sure it sux as

      • If you live in the ghetto country club prison may be no big deal. Make a 6-7 figure salary? I'm pretty sure it sux ass.

        No, the ass sucking is going on in the regular prison system. And that illustrates why we should only have one prison system, not a special cushy one for white collar criminals. A weak person who is poor gets thrown into the grinder with all the other poor people. A weak person who is rich doesn't. So what's the incentive for the rich to stop producing prisons which are horrible torture pits? None. Further, white collar criminals are more likely to get away without prison time at all than the hard-working c

  • Amazing (Score:5, Insightful)

    by Squirmy McPhee ( 856939 ) on Saturday August 05, 2017 @05:28PM (#54948315)
    Amazing to me that TWO Volkswagen execs have been found criminally liable for this, and only one exec from ALL OF THE BANKS was found criminally liable for any of the fallout of the 2008 financial crisis. Other commenters are saying that they're going to jail because they cost people money, but what Volkswagen cost people is peanuts compared to what bankers cost people, so that doesn't really square with me.
    • That's cute, you think peons are people.

      The VW clusterfuck cost the rich money, it came too sudden before they could spin most of it off on pension funds and without any bailouts to boot.

      • The great recession cost a lot of rich people a lot of money in a very direct way.

        But it is tough to prove that someone had criminal intent when they did their job shitily.

        C-Suite to underling: make sure slicing and dicing mortgages distributes risk evenly;
        --> underling to peon: give me more volume;
        ----> peon to sales team: volume is all that matters.

        This can done with or without a nudge and a wink, but the result will be the same.

        "Ladies and gentlemen of the jury, the evidence will show that Bob Peo

      • The VW clusterfuck cost the rich money,

        What rich person would drive a VW? Looks like a common person car in pretty much the entire western world to me.

    • What Volkswagen did was really easy for almost everyone to understand and so very hard to wriggle out of. The problem with bankers is that the laws they violate are amazingly complex and very hard for juries to understand. This gives them a lot more wriggle room to weasel out of criminal charges.

      Defence lawyers know this and use it to fiddle the jury pool. My uncle was a UK bank inspector and sometimes had to sit in on trials for bank managers he caught on the fiddle. He always used to claim that jury se
    • What the banks did back in 2008 was maybe malicious, unethical, stupid etc.... But not illegal - that is why we tryed to change the law with, laws that republican in their immense wisdom repelled (/sarcasm). On the other hand what VW did was downright illegal. That is the main difference.
      • > What the banks did back in 2008 was maybe malicious, unethical, stupid etc.... But not illegal

        If I may beg to differ: a great deal of it was in fact illegal. Much of the bank fraud and real estate fraud was based on pyramid schemes, where collections of debt or of real estate were sold off to newer, lower level members of the scheme to harvest profit for higher level members of the scheme, and especially for the top members of the scheme. Other members of the scheme profited from the transaction fees p

    • Don't be amazed. Volkswagen is not an American company, let alone an American bank. Add to that the mediapathic nature of their crimes in a world which is beginning to finally give a crap about air pollution — think of the babies' lungs and so on — and it's easy to see why it's easier to punish some VW execs than some American bankers. The average American can't even comprehend the intricacies of the bank bailout, but anyone can understand that more diesel emissions means a negative health impac

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