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Volkswagen is close to resolving a federal criminal investigation into its cheating on diesel emissions tests for more than $2 billion, according to three people briefed on the negotiations.
The settlement could come as early as next week, barring any last-minute hiccups, those people said. The German automaker is eager to put the Justice Department investigation behind it before President-elect Donald J. Trump is sworn in on Jan. 20, according to two others familiar with the company’s position.
An intensive investigation into the emissions test manipulation has been underway for more than a year, involving American and German investigators and prosecutors. A resolution to the criminal investigation in the United States would allow Volkswagen to try to move on from a scandal that has hobbled its diesel business.
In it unclear whether Volkswagen or any of its employees would plead guilty to criminal charges, or negotiate a deal to defer prosecution. In settlements with General Motors and Toyota Motor over their handling of safety defects for example, the companies agreed to pay large fines, but did not plead guilty.
American prosecutors have also traveled to Germany in recent months to interview Volkswagen executives, according to German prosecutors. In addition, the Justice Department has offered witnesses assurances that they would not be arrested if they traveled to the United States for questioning, according to a defense lawyer involved in the case as well as one witness, who spoke only on the condition of anonymity. German suspects are safe from arrest by the United States in their home country, which normally does not extradite its own citizens.
It is not clear if any of the suspects, who include former Volkswagen managers and engineers involved in diesel engine development, have accepted the offer. The offers typically allow witnesses to travel to the United States and back without fear of arrest, but do not include a guarantee they will not be charged in the future.
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How Volkswagen Is Grappling With Its Diesel Scandal
Volkswagen has admitted that 11 million of its vehicles were equipped with software that was used to cheat on emissions tests. The company is now contending with the fallout.
Volkswagen acknowledged in 2015 that it had fitted 11 million diesel cars worldwide with illegal software that made the vehicles capable of defeating pollution tests. The software enabled the cars to detect when they were being tested for emissions, and turn on pollution-control systems to curb emissions at the cost of engine performance. But those emissions controls were not fully deployed on the road, where cars spewed nitrogen oxide at up to 40 times the levels allowed under the Clean Air Act.
Volkswagen has already agreed to pay up to nearly $16 billion to resolve civil claims in what has become one of the United States’ largest consumer class-action settlements ever, involving half a million cars.
Under the settlement, most car owners have the option of either selling their vehicle back to Volkswagen, or getting them fixed, granted the automaker could propose a fix that satisfied U.S. regulators.
The Environmental Protection Agency and California Air Resources Board on Friday approved the first of those fixes, covering about 58,000 newer cars.
The scandal has affected a range of Volkswagen and Audi models, including the Audi A3, Volkswagen Beetle, Golf, Jetta and Passat diesel cars. It was brought to light in September 2015, when the Environmental Protection Agency accused Volkswagen of using software to detect when the cars were undergoing testing.
An intensive inquiry into the cheating has been underway since then, involving American and German investigators and prosecutors, as well as lawyers for the law firm Jones Day, which was hired by Volkswagen to conduct an internal investigation.
The expected settlement was reported earlier by The Wall Street Journal.
Progress toward a resolution of the case has been frustrated by differences in German and United States law and customs. German prosecutors do not work out plea deals with suspects as routinely as in the case with the United States. Punishments in the United States also tend to be harsher, and seen as unacceptable by the German suspects.
One person has been convicted in the United States: James Liang, a former Volkswagen engineer who worked for the company in California. Mr. Liang pleaded guilty in August to charges including conspiracy to defraud the federal government and violating the Clean Air Act. He is expected to receive a reduced sentence in return for cooperating with investigators.
