German Police Arrest Second Person in Diesel Emissions Scandal

By William Boston Features Dow Jones Newswires

German police have arrested a second person as they widen their investigation into the role of Audi, Volkswagen AG's luxury car unit, in the car maker's diesel emissions scandal, a spokeswoman for the prosecutor in Munich said Thursday.

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Andrea Grape, spokeswoman for the prosecutor, declined to identify the person arrested, citing German privacy laws. She said he appeared before a judge on Thursday and was accused of fraud and illegal advertising in connection with manufacturing and selling cars that contained illegal software designed to dupe emissions tests.

Although investigations have been underway for two years, only two people have been charged so far.

Prosecutors in Braunschweig are investigating nearly 50 people in connection with the scandal, including Volkswagen's former chief executive, Martin Winterkorn, who resigned just days after the scandal was disclosed in 2015. Mr. Winterkorn has repeatedly denied any involvement in the cheating scandal or coverup.

Law enforcement officials raided Audi's offices in March, arriving shortly before the company was preparing to hold an unrelated news conference, as dozens of journalists and stock market analysts looked on.

The arrest this week comes after prosecutors nabbed Zaccheo Giovanni Pamio in July, a former Audi employee who was head of thermodynamics in the car maker's engine development department.

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Mr. Pamio was the first arrest in Germany in connection with the Volkswagen scandal. The U.S. government has indicted eight people in connection with the scandal, including Mr. Pamio.

Terry Brennan, a Cleveland-based lawyer who represents Mr. Pamio, could not immediately be reached for comment.

Most of the former managers charged are in Germany out of reach to U.S. authorities because Germany does not extradite its citizens. Mr. Pamio is an Italian citizen and could be extradited to the U.S.

U.S. environmental regulators disclosed in September 2015 that Volkswagen had installed illegal software on some diesel engines used in cars that were sold to American consumers. Volkswagen then admitted to installing the software on millions of vehicles world-wide.

Two Volkswagen employees pleaded guilty in the U.S. One has been sentenced to serve 40 months in prison. Another is in prison awaiting sentencing.

Engineers at Volkswagen rigged 2-liter diesel engines for compact cars that were used by Volkswagen and some of its other brands to turn on emissions controls when it recognized the car was being tested and turning controls off when the car was back on the road.

At Audi, engineers rigged larger 3-liter diesel engines that it built and which were used by Audi, Porsche, and Volkswagen in larger sedans and sport-utility vehicles.

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

September 28, 2017 18:06 ET (22:06 GMT)