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Change in prosecutorial strategy in VW case?

Tom Fox | July 18, 2017

Will any Volkswagen senior executives be brought to justice in the United States for their role in the emissions testing scandal? While eight VW executives have been indicted, only one executive has been arrested. It was Oliver Schmidt, a Volkswagen AG executive who was arrested In January when departing the United States from a Christmas vacation. One other lower-level U.S. employee has been indicted and has pled guilty. The remaining five executives who have been indicted live in Germany, which is disinclined to extradite its citizens to the United States for trial. Of those five indicted, none were senior executives in the company.

Now, however, the Justice Department may be changing its strategy, as it has charged a former executive at VW’s luxury car brand Audi, Zaccheo Giovanni Pamio. The key difference that facilitated the arrest of Pamio, which happened in Germany, is that he was an Italian citizen living in Germany who was not a German citizen. While Pamio is seen to be a smaller player in the burgeoning scandal, the complaint filed against him alleges he acted under pressure to aid in the defeat device software development. More critically, he is alleged to have presented to at least one board member of the company about how the software for the defeat device worked.

The arrest of Pamio potentially opens a new front in the government’s attempts to bring charges against senior executives at VW. It is a well-known prosecutorial tactic to indict lower-level employees who will then flip by giving up the names of those above them in the corporate hierarchy who were either involved or engaged in conscious indifference. It would appear the Justice Department wants to obtain the identities of senior executives at the company.

The ongoing question is whether any senior executive in Volkswagen will ever be brought to justice. Even if the United States obtains names, dates, and some type of damning physical evidence, German citizens will not be coming to the United States for trial via extradition. After Schmidt’s arrest, The Man From FCPA would opine that no German citizen under suspicion would be so inane as to travel to the United States. Whether the German government will have the backbone to try senior executives of its largest auto manufacture remains an open question.