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Volkswagen Engineer Sentenced for His Role in Conspiracy to Cheat U.S. Emissions Tests

A Volkswagen engineer was sentenced by U.S. District Judge Sean F. Cox of the Eastern District of Michigan to 40 months in federal prison, and two years of supervised release, for his role in a nearly 10-year conspiracy to defraud U.S. regulators and Volkswagen customers by implementing software specifically designed to cheat emissions tests in hundreds of thousands of Volkswagen “clean diesel” vehicles sold in the U.S., the Justice Department announced today. During the hearing, the Court noted that the sentence took into consideration the defendant’s cooperation in the investigation and prosecution of the company and others.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.

James Robert Liang, 63, of Newbury Park, Calif., pleaded guilty last year to one count of conspiracy to defraud the U.S., commit wire fraud and violate the Clean Air Act.

In connection with his guilty plea, the defendant admitted that he was employed by Volkswagen AG (VW) from 1983 until May 2008, working in its diesel development department in Wolfsburg, Germany. Beginning in about 2006, he and his co-conspirators began to design a new “EA 189” diesel engine for sale in the U.S. When Liang and his co-conspirators realized that they could not design a diesel engine that would meet the stricter U.S. emissions standards, they designed and implemented software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer, versus being driven on the road under normal driving conditions (the defeat device), in order to cheat U.S. emissions tests. VW tasked Liang with making the defeat device work by calibrating it to recognize specific U.S. emissions tests’ drive cycles. In May 2008, Liang moved to the U.S. to assist in the launch of VW’s new “clean diesel” vehicles in the U.S. market. While working at VW’s testing facility in Oxnard, California, he held the title of Leader of Diesel Competence.

Liang further admitted that, for over eight years, employees of VW and its U.S. subsidiary met with the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) to seek the certifications required to sell each model year of its vehicles to U.S. customers. During these meetings, some of which Liang personally attended, Liang’s co-conspirators lied to the regulators by telling them that the VW diesel vehicles complied with U.S. emissions standards. Instead, these diesel vehicles were cheating the U.S. emissions test through use of the defeat device.

Liang admitted that for each new model year from 2009 through 2016, Liang’s co-conspirators continued to falsely and fraudulently certify to EPA and CARB that VW diesel vehicles met U.S. emissions standards and complied with the Clean Air Act. Liang further admitted that he and his co-conspirators knew that VW falsely marketed VW diesel vehicles as “clean diesel” and environmentally-friendly, while, at the same time, promoting the vehicles’ increased fuel economy, a result achieved by using the defeat device. At the same time, Liang and his co-conspirators also continued to improve and refine the defeat device to better recognize when the VW diesel vehicles were being tested versus being driven on the road.

Liang also admitted that he helped his co-conspirators continue to lie to the EPA, CARB and VW customers even after the regulatory agencies started raising questions about the vehicles’ on-road performance following an independent study commissioned by the International Council on Clean Transportation, which showed that the diesel vehicles’ emissions on the road were more than 30 times higher than shown on the dynamometer.

The FBI’s Detroit Office and EPA-CID are investigating the case. Deputy Chief Benjamin D. Singer and Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Senior Trial Attorney Jennifer L. Blackwell of the Environment and Natural Resources Division, and Criminal Division Chief Mark Chutkow and Economic Crimes Unit Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.