When Volkswagen admitted to rigging millions of supposedly “clean diesel” vehicles to cheat on emissions tests, the carmaker claimed that only a few engineers knew these “defeat devices” were in place. However, new lawsuits filed by three states allege that VW execs knew of the chicanery, and that the car company was committing fraud for nearly a decade.
The attorneys general for New York, Maryland, and Massachusetts filed lawsuits against the carmaker on Tuesday accusing VW of violating state environmental laws and defrauding regulators by selling vehicles it knew were not compliant with clean air laws, the New York Times reports.
The lawsuits allege that the company engaged in nearly a decade of orchestrated fraud, involving not only a small group of engineers — which VW claims were the only ones to know about the defeat devices — but also dozens of managers and the company’s boardroom.
According to the New York lawsuit [PDF], Volkswagen’s corporate culture allowed for the “willful and systematic scheme of cheating.”
“This scheme, which extended over nearly a decade, was perpetrated by Volkswagen AG and its Audi, Volkswagen and Porsche subsidiaries, through their employees, executives, and officers,” the New York complaint states, connecting, for the first time, VW CEO Matthias Muller to the cheating scandal.
The complaint alleges that the scandal began at the Audi brand in 2006, when Muller was made aware of a decision to not equip Audi vehicles with equipment needed to meet American clean-air standards.
In order to save money, according to the lawsuit, the company instead installed defeat devices in the cars. At the time of the decision, Muller was head of product management of Audi, however, the lawsuit doesn’t specifically says Muller had knowledge of the defeat device.
“For years after its initial adoption of defeat devices … Volkswagen continued to cheat by adapting its defeat device software to the modified engines and emissions systems associated with the newer models,” the complaint states.
In addition to Muller’s alleged knowledge of the deception, the NY complaint claims that more than two dozen VW engineers and managers were involved in the scandal, including the former head of engine and transmission development at Volkswagen and Audi; former head of development for Audi; and former head of development for the Volkswagen brand.
The suit also claims that the company essentially approved of the cheating by awarding raises and bonuses to executives who took part in the emissions deception.
“Recent actions demonstrate that the company’s culture that incentivizes cheating and denies accountability comes from the very top and, even now, remains unchecked,” the suit claims, noting that Muller and other executives received about $70 million in salary and bonuses in 2015.
After equipping the vehicles with defeat devices in 2006, the NY complaint claims that VW began a marketing campaign to promote clean diesel vehicles in the U.S.
“Volkswagen’s marketing strategy focused on positioning ‘Clean Diesel as [an] environmental halo over [the] VW brand’ and making ‘environmental conscience’ the ‘centerpiece’ of Volkswagen’s ‘innovation/technology story.’”
The lawsuit cites a VW commercial from 2015 that attempted to debunk “old wives’ tales” that diesel was dirty and noxious. To do this, the woman placed a white scarf against the exhaust of a diesel and states, “see how clean it is!”
A separate Audi commercial from 2010 features people being arrested by the “Green Police” for installing incandescent light bulbs, overheating their swimming pools, or failing to compost. At the end, the Green Police inspect cars at a roadblock, waving through a driver in an Audi A3.
Because of these allegedly false advertisements, VW became the largest seller of diesel light-duty passenger vehicles in the U.S., selling about 11 million vehicles in 150 countries around the world, the complaint says.
“As a result of their deceptive and/or fraudulent business practices, and their failure to disclose that under normal operating conditions the vehicles emit up to forty times the allowed levels of [nitrogen oxide] pollution, VW sold vehicles that, based on initial estimates, have illegally emitted over 45,000 additional tons of [nitrogen oxide] emissions in the United States, often into economically disadvantaged communities adjoining highways whose residents are prone to asthma and other respiratory diseases that NOx emissions exacerbate,” the NY suit claims.
According to the complaint, when a research study published by the University of West Virginia in 2014 found two diesel cars were found to have polluted up to 40 times more on highways than in laboratory tests, executives at VW allegedly panicked.
Over the next 17 months, from May 2014 to September 2015, VW began to “mislead and confuse” regulators and the public about the true cause of the emission disparity in lab and street tests.
As part of this process, the employees allegedly destroyed or deleted documents related to the defeat devices.
“At least eight employees – all in engineering departments involved in the creation of the defeat devices – got the unmistakable message: they promptly deleted or removed incriminating data about the devices from the company’s records. Some, but not all, of the data has been recovered,” the complaint alleges.
The New York Times reports that the Attorney General offices for Massachusetts and Maryland have filed lawsuits against VW citing the same issues New York has.
The lawsuits do not specify how much the states are seeking with the claims, but they could be in the hundreds of millions of dollars, the Times reports.
“The allegations against Volkswagen, Audi, and Porsche reveal a culture of deeply rooted corporate arrogance, combined with a conscious disregard for the rule of law or the protection of public health and the environment,” New York Attorney General Eric Schneiderman said in a statement.
The state’s lawsuits come just weeks after VW announced that it had reached a $603 million settlement with 44 states — including Massachusetts, Maryland, and New York — to resolve existing and potential state consumer protection claims.
by Ashlee Kieler via Consumerist
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