U.S. charges ex-Audi manager in emissions cheating case

WASHINGTON (Reuters) - The U.S. Justice Department said on Thursday it charged a former Audi manager with directing employees at the company, a division of Volkswagen AG VOWG_p.DE, to design software to cheat U.S. emissions tests in thousands of Audi diesel cars.

The Department of Justice (DOJ) logo is pictured on a wall after a news conference in New York December 5, 2013. REUTERS/Carlo Allegri

Giovanni Pamio, an Italian citizen, was charged with conspiracy to defraud the United States, wire fraud, and violation of the Clean Air Act, the Justice Department said in a news release.

The complaint released on Thursday evening said U.S. authorities had help from an unidentified Audi employee who works in the German luxury brand’s diesel engine development department. The witness is cooperating with U.S. authorities, and they agreed in return not to prosecute the person.

The criminal complaint described a series of exchanges across a period of at least seven years in which certain Audi engineers warned that the pollution control systems being used on the brand’s diesel engines violated U.S. clean air rules.

U.S. prosecutors charged in their complaint that Pamio ignored or suppressed those warnings, and ordered subordinates to send false information to American regulators stating that Audi’s “clean diesels” did not use technology designed to cheat federal pollution tests.

The complaint said that in October 2013, Pamio ordered his subordinates to prepare a presentation for a “then-senior executive and member of Audi’s brand management board” describing in detail the technology used to limit an engine’s consumption of a urea formula, called AdBlue, designed to scrub pollutants from the exhaust.

Audi employees feared that an AdBlue tank big enough to require refills only every 10,000 miles (16,000 km) would “interfere with features considered to be attractive to customers, such as a high-end sound system,” according to the government’s complaint.

Neither Pamio nor his representatives could be reached for comment.

VW in September 2015 admitted using sophisticated secret software in its cars to cheat exhaust emissions tests and pleaded guilty in March in a U.S. court to three felonies in connection with the scandal.

Volkswagen has agreed to spend as much as $25 billion in the United States to resolve claims from owners and regulators over polluting diesel vehicles and has offered to buy back about 500,000 vehicles.

U.S. authorities previously indicted seven former or current Volkswagen executives in connection with cheating on emissions tests.

James Liang, a VW employee who pleaded guilty to misleading regulators, is cooperating with prosecutors. Oliver Schmidt, former chief of Volkswagen’s environmental and engineering operation in Michigan, is awaiting trial.

Reporting by Chris Sanders; Editing by Jonathan Oatis and Peter Cooney