US Volkswagen Engineer Pleads Guilty to Fraud Charge

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In a court appearance in Detroit Friday, former Volkswagen engineer James Liang pleaded guilty to conspiring to commit fraud against U.S. regulators and customers. The plea marks the first criminal charge to result from the U.S. Department of Justice’s investigation into the Volkswagen diesel-engine cheating scandal.

In September of last year a defeat device and software was discovered in VW’s 2-liter diesel engines that could sense the difference between on-road driving and an emissions test device. When on the test bed, the software kicked in, causing the engine to report data indicating that emissions met approved standards when in fact it did not under normal operating procedures.

According to a report at Bloomberg News, Liang worked at VW’s Wolfsburg, Germany, headquarters in 2006 and “was directly involved in the development of the defeat device for the Jetta in 2006.” By 2014 he was working at VW’s Oxnard, California, facility as part of VW’s effort to hide from U.S. regulators the fact that the defeat devices did not work as described, spewing emissions well above legal limits.

Liang is reportedly cooperating with investigators but faces a maximum penalty five years in prison. He is one of several engineers suspended by Volkswagen after the company admitted last year that it had rigged emissions testing since 2009.

At about the same time as VW’s admission of guilt last year, the Justice Department implemented a policy that requires that any corporate investigation that results in a charge against the company also include a plan to charge individuals. If the company wants to be identified as cooperating with the department, the company has to name names.