Former Audi Engine Manager Charged in Emissions Scandal -- Update

A former engine-development manager at Audi was charged in the U.S. for his role in a wide-ranging emissions scandal at Volkswagen AG that has already led to the indictment of seven others and a $2.8 billion criminal fine for the German auto maker, U.S. authorities said Thursday.

Giovanni Pamio, who worked as head of thermodynamics for Audi's diesel engine development, was accused of working to help implement software designed to cheat U.S. emissions tests in thousands of Audi "clean diesel" vehicles. He was charged with conspiring to defraud the U.S., violating the Clean Air Act, and wire fraud.

Mr. Pamio, described by the Justice Department as a 60-year-old Italian citizen, couldn't be located for comment. A Volkswagen spokeswoman said the company "continues to cooperate with investigations by the U.S. Department of Justice into the conduct of individuals. It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters."

The case, filed as a criminal complaint, suggests the Justice Department under President Donald Trump is continuing to pursue a case that became a signature prosecution of the Obama administration.

Volkswagen agreed to plead guilty in January, after it admitted in 2015 that it had rigged nearly 11 million diesel vehicles world-wide, including some 600,000 in the U.S., to cheat on emissions tests. The cars produced toxic tailpipe emissions up to 40 times the allowable limits during normal road use. The company's admission set off a whirlwind of civil litigation and a criminal investigation into the company and many of its senior executives.

Regulators also found similar conduct at Audi, Volkswagen's luxury unit. German police raided the homes of two Audi executives earlier this year.

Italy has an extradition treaty with the U.S., which could make it easier for U.S. prosecutors to gain custody of Mr. Pamio. A Justice Department spokesman had no immediate comment on Mr. Pamio's whereabouts.

According to the Justice Department, Mr. Pamio led a team of engineers responsible for designing emissions-control systems to meet regulatory standards from 2006 until November 2015, after the Volkswagen emissions scandal became public.

Volkswagen's legal settlements stemming from its emissions fraud could exceed $25 billion in the U.S. alone depending on how many vehicles the auto maker is forced to repurchase. Volkswagen has reached settlements in the U.S. with consumers, regulators, dealers, state attorneys general and federal prosecutors.

Other individuals have been indicted in the U.S. as a result of the emissions deception. A Volkswagen engineer who pleaded guilty to criminal conduct is scheduled to be sentenced later this month. A former head of Volkswagen's Michigan environment and engineering office is in custody awaiting trial. Several other Volkswagen employees who were charged are believed to reside in Germany and aren't likely to be extradited.

Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com and Mike Spector at mike.spector@wsj.com

(END) Dow Jones Newswires

July 06, 2017 23:31 ET (03:31 GMT)