DETROIT—A Volkswagen engineer’s decision to tell everything he knows about the company’s scheme to cheat on U.S. emissions tests is a major break for investigators and a message to others involved to cooperate or face prosecution, according to legal experts.
James Robert Liang, 62, of Newbury Park, California, pleaded guilty in Detroit Friday to one count of conspiracy to defraud the government and agreed to cooperate with investigations in the U.S. and Germany. Liang is the first person to enter a plea in the wide-ranging case, but legal experts say his knowledge of the scheme means he won’t be the last.
“It becomes a chain up the ladder,” said William Carter, former federal prosecutor in Los Angeles who specialized in environmental crimes. “They are sending a very strong signal to all those involved that the train is leaving the station, and if you want to be on it, it’s time to cooperate.”
The Justice Department also unsealed a grand jury indictment against Laing that detailed a 10-year conspiracy by Volkswagen employees in the U.S. and Germany to repeatedly dupe U.S. regulators by using sophisticated software to turn on emissions controls when the cars were being tested and turn them off during real-world driving. The indictment detailed e-mails between Liang and co-workers that initially admitted to cheating in an almost cavalier manner but then turned desperate after the deception was uncovered.
Tests commissioned by a nonprofit organization in 2014 found that certain Volkswagen models with diesel engines emitted more than the allowable limit of pollutants. More than a year later, Volkswagen admitted to installing the software on about 500,000 2-liter diesel engines in VW and Audi models in the U.S.
The Environmental Protection Agency found that the cars emitted up to 40 times the legal limit for nitrogen oxide, which can cause human respiratory problems.
Volkswagen, based in Wolfsburg, Germany, briefly was the world’s top-selling automaker before the scandal. Sales fell sharply in the U.S., where the company heavily marketed its “clean diesel” vehicles. In June, VW agreed to pay $15 billion to settle customer and government lawsuits in the U.S., including spending up to $10 billion to buy back or repair the cheating diesels.
Jacob Frenkel, a white-collar defense lawyer in Washington and former federal prosecutor, said the indictment reveals a “sphere of communication” with Liang, and everyone involved knows they’ve been implicated.
“Mr. Liang certainly knew enough that the U.S. government has embraced him as its first and certainly a prominent cooperator,” said Frenkel, who added the Liang likely will get little or no prison time due to his cooperation. Sentencing guidelines call for a five-year prison term and up to a $250,000 fine when Liang is sentenced July 11.
