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Volkswagen faces criminal investigation over emissions standard evasion, P.2

Sep 30, 2015 | Fraud |

In our last post, we began speaking about the recent Volkswagen emissions scandal. As we mentioned, the company is currently under investigation for potential criminal liability for deliberately skirting environmental law. As a result, the company very likely could end up facing corporate criminal charges and a criminal fine. In addition, individual executives and employees could end up facing criminal charges for their role in the scandal

It will be interesting to see how things progress with the criminal side of the case, given that the Justice Department recently announced that companies which want to be rewarded for cooperating with investigators will be required to name individuals who were allegedly responsible for misconduct. 

In any criminal case against in which fraud is alleged, of course, knowledge and intent are important issues that prosecutors must address. In order to be face criminal liability under the Clean Air Act—the law in which the EPA’s emissions standards are rooted—an owner or operator of a “stationary source” (factory, refinery, power plant, etc.) must knowingly “construct a new source, modify an existing source, emit a hazardous pollutant, or fail to comply with a design, equipment, work practice or operation standard” in violation of an applicable emission standard.

The key word here is knowingly. Proving that there was intent to defraud is not always easy, particularly if a strong criminal defense is provided. That being said, it may not be so difficult in the case of Volkswagen. After all, the company has already admitted to wrongdoing. It would seem it is just a matter of time before investigators are able to gain access to evidence criminal intent.

The bigger issue in this case, though, is that prosecutors might simply be unable to pursue Volkswagen for criminal penalties under the Clean Air Act due to a loophole in the law. Because of this, prosecutors may end up looking to other possibilities to punish the company. In our next post, we’ll speak about this issue.

Source: EPA, Criminal Provisions of the Clean Air Act,” Accessed September 30, 2015.

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