German prosecutors have launched a second criminal investigation against Martin Winterkorn, the former chief executive of Volkswagen who resigned days after the carmaker’s diesel-emissions scandal became public in September 2015, as part of an expanded probe into what has become known around the world as "Dieselgate."
Mr. Winterkorn, 69, now also faces a fraud investigation, according to the prosecutors’ office in the city of Braunschweig, the district that is home to VW’s headquarters in Wolfsburg.
“Sufficient factual indications have accumulated that the aforementioned accused could have known earlier of the manipulative software and its effects than he has publicly claimed,” the prosecutors’ office said in statement Friday.
The new fraud investigation is in addition to a long-running prosecutors’ investigation into a possible breach of investor disclosure laws. That probe alleges Mr. Winterkorn and VW may have informed shareholders too late about the manipulation and its costs.
The initial inquiry also affects the chairman of Volkswagen Passenger Cars, Herbert Diess, and chairman of the supervisory board, Hans Dieter Pötsch. Volkswagen has denied wrongdoing, saying it informed investors in a timely manner in 2015. Prosecutors made no mention of whether the new fraud investigation might also include Mr. Diess and Mr. Pötsch.
As recently as last week, Mr. Winterkorn testified in front of a parliamentary investigative committee that he did not learn of the deception before September 2015, when it was revealed to the public by U.S. authorities. The scandal affects 11 million cars worldwide and has already cost VW $24 billion in fines so far. At the same time the former executive denied to give details about exactly when he received information about a diesel investigation in the United States, citing ongoing investigations.
German prosecutors said they had raided various VW locations and broadened the scope of their probe, raising the total number suspected of fraud to 37.
Responding to the new charges Mr. Winterkorn, who has been enjoying an annual pension of €1.1 million since the start of this year, again denied involvement in the scandal, his lawyer said according to news agency Reuters. The former CEO had no knowledge of the manipulation before September 2015, the lawyer said.
If found guilty of fraud, Mr. Winterkorn could face a penalty of up to 10 years in prison or a fine. The U.S. Federal Bureau of Investigation is also examining whether Mr. Winterkorn and other board members knew of the scandal as early as July 27 2015. The FBI alleges that VW employees sent a memo regarding the “diesel issue” to Mr. Winterkorn and the head of VW Passenger Cars, Herbert Diess, who currently is still leading the VW core brand.
Mr. Diess’ lawyer Tido Park told Handelsblatt the executive was not subject to the broadened investigation and fraud allegation coming from Braunschweig. Mr. Pötsch was not immediately available for comment
Volkswagen, which has been in crisis ever since U.S. environmental regulators revealed the scam on September 18, 2015, has blamed lower-level engineers and managers for the scandal and said its executive board did not learn of it until early September.
Around 11 million cars from the brands VW, Porsche, Audi and Skoda emitted more toxic nitrogen oxide gases on the road than shown during tests, due to manipulative software installed. Of these manipulated cars, 585,000 were sold in the United States.
In a $4.3-billion settlement VW agreed with the U.S. Justice Department two weeks ago, the carmaker confessed it was “guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading.”
The U.S. Department of Justice has so far indicted six VW managers, including Heinz-Jakob Neusser, who was a board member of VW Passenger Cars and its head of development in 2015. A seventh suspect, the German national James Liang, last year pleaded guilty to fraud charges.
German prosecutors, for their part, on Friday said they had raided various VW locations and broadened the scope of their VW Dieselgate probe, raising the total number suspected of fraud to 37 from the initial 21.
“As part of the increase in the number of accused, a total of 28 objects mainly located in Wolfsburg, Gifhorn and Braunschweig have been searched this week,” the prosecutors’ office said.
The raids mainly focused on car supplier IAV, which is 50 percent owned by VW, Handelsblatt learned from people familiar with the matter. IAV, a Berlin-based car parts maker which makes powertrain technologies and car electronics, was not immediately available for comment.
The new suspects on the list are mainly software specialists who are alleged to have played a crucial role in designing the program to manipulate diesel emissions, Handelsblatt learned.
So far, VW’s former head of development, Hans-Jakob Neusser, is the most senior manager in the fraud investigation. Mr. Neusser, who held the post between July 2013 and September 2015, denies the accusations.
Martin Murphy covers the steel, car and defense industries for Handelsblatt. Volker Votsmeier is an editor with Handelsblatt's investigative reporting team. Gilbert Kreijger, an editor with Handelsblatt Global in Berlin, contributed to this article. To contact the authors: [email protected] and [email protected]
This story was updated with the statement from prosecutors at 16:15 CET Friday.