Audi CEO Arrested in Emissions-Cheating Investigation -- 2nd Update
19 June 2018 - 4:40AM
Dow Jones News
By William Boston
BERLIN -- The chief executive of Volkswagen AG's luxury unit
Audi was arrested and imprisoned without bail after prosecutors
said they were worried he might try to hinder a probe into whether
he played a role in the German car maker's diesel
emissions-cheating scandal.
The arrest of the executive, Rupert Stadler, came a week after
Munich prosecutors searched his private residence and added him to
a list of about 20 suspects in a broad fraud investigation stemming
from the scandal.
Volkswagen admitted in 2015 to rigging nearly 11 million
diesel-powered vehicles, including Audi models, with software that
allowed them to cheat on emissions tests. The following year, the
Audi unit was part of a broader settlement, in which Volkswagen
pleaded guilty to defrauding the U.S. government. Volkswagen has
incurred around $25 billion in penalties, fines, and compensation
for customers stemming from the admission.
The scandal has also claimed a growing roster of Volkswagen
executives. The U.S. has indicted eight, including former Chief
Executive Martin Winterkorn, on charges of conspiracy to defraud
the U.S. and to commit wire fraud, and to violate the Clean Air
Act. Two are serving time in federal prison. Mr. Winterkorn, who
has denied knowledge of the cheating, and the others remain in
Germany, which has a law prohibiting the government from
extraditing its citizens.
Meanwhile, various German probes into the cheating have been
progressing more slowly. Mr. Stadler is the third person to be
arrested by German authorities so far in connection with the diesel
scandal.
A Munich prosecutor said Mr. Stadler was arrested at his home
early Monday. A prosecutor in that office said investigators found
evidence during the raid of Mr. Stadler's home last week that
suggested he may try to disrupt the investigation.
"There was evidence that people and other suspects would be
influenced. That's why we immediately issued an arrest warrant,"
state's attorney Stephan Necknig said. He didn't provide further
details.
Mr. Stadler hasn't been charged with any wrongdoing. In Germany,
it is common practice for prominent individuals suspected of a
crime to be named by prosecutors in public. Being named a suspect
doesn't mean the person will ultimately be charged. Mr. Stadler's
attorney couldn't immediately be reached for comment.
A Volkswagen spokesman declined to comment, citing the ongoing
investigation. Audi declined to comment on the allegations, saying
only that "the presumption of innocence also applies to Mr.
Stadler."
Last week, the Munich prosecutor's office added Mr. Stadler as a
suspect to an investigation into fraud and illegal advertising in
connection with the sale of more than 200,000 Audi vehicles in the
U.S. and Europe that included illegal software that allowed the
vehicles to cheat on emissions tests. Mr. Stadler hasn't commented.
Audi declined to comment at the time, except to say it was
cooperating in the probe.
In July last year, Munich prosecutors ordered the arrest of
Zaccheo Giovanni Pamio, the former head of thermodynamics at Audi's
engine development division. He has been released on bail, and it
is unclear if he was charged with any offense. Mr. Pamio has been
indicted in the U.S., which is seeking his extradition. Mr. Pamio's
attorney couldn't immediately be reached for comment.
In September, Wolfgang Hatz, Volkswagen's former engine chief,
was charged with fraud and illegal advertising resulting from the
sale of Audi diesel vehicles. He has been held in custody pending
trial. Mr. Hatz's attorney declined to comment.
--Ulrike Dauer and Markus Klausen contributed to this
article.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
June 18, 2018 14:25 ET (18:25 GMT)
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