Ex-Audi boss convicted of fraud in automaker's diesel emissions scandal

Former Audi boss Rupert Stadler was convicted of fraud Tuesday in connection with the automaker’s diesel emissions scandal, making him the highest-ranking executive found guilty over cars that cheated on emissions tests with the help of illegal software.

A German court handed Stadler a suspended prison sentence of 21 months and ordered him to pay a fine of 1.1 million euros (USD 1.2 million), some of which will go to charitable groups. The sentence resulted from an agreement between his lawyers, the judge and prosecutors after he pleaded guilty last month.

The former head of Volkswagen’s luxury division admitted wrongdoing and regret for his failure to keep rigged cars off the market even after the scandal had become public knowledge.

The Munich regional court also sentenced the former head of engine development, Wolfgang Hatz, and a former Audi engineer, identified only as Giovanni P. for privacy reasons, to suspended prison sentences and fines.

They were accused of ensuring that diesel engines met emissions limits during testing but not on the road to save on construction costs. Prosecutors had objected to a plea agreement with Hatz. The verdicts are likely to be appealed.

The court already closed a case in April against a fourth defendant who had testified for the prosecution and ordered him to pay a fine.

It is the first criminal trial to conclude in Germany in connection with the diesel emissions scandal.

Stadler had been charged with fraud and false certification by prosecutors who said he let cars with rigged software be sold even after the the US Environmental Protection Agency uncovered the fraud at Volkswagen and Audi in September 2015.

He was detained in 2018 and held for four months. The 60-year-old resigned as Audi chief and a member of the Volkswagen board later that year and has since paid the company some 4.1 million euros in damages for failing in his oversight duties.

His boss at the time, former VW chief executive Martin Winterkorn, has been charged by US and German authorities, but Germany does not generally extradite its citizens to countries outside the European Union.

German proceedings against Winterkorn also have stalled because he is in poor health. Four other cases against former VW managers are ongoing in Braunschweig.

A spokesman for the Munich court, Laurent Lafleur, said Stadler’s guilty plea together with the extensive evidence heard during the trial could play an important role in other cases.

The diesel scandal cost Volkswagen more than USD 30 billion in fines and settlements and saw two US executives sent to prison.

It pushed the entire auto industry away from reliance on diesel engines, which had been almost half the auto market in Europe, and helped accelerate the shift to electric vehicles.