Volkswagen to pay $2.8 billion in US diesel emission scandal

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A USA judge on Friday sentenced Volkswagen (IOB: 0P6N.IL - news) to pay a $2.8 billion criminal penalty in the diesel emissions cheating scandal, in line with a deal struck between the automaker and the U.S. government.

Judge Sean Cox is holding a hearing Friday morning in federal court in Detroit.

Regulators in 2015 discovered that Volkswagen diesel cars, marketed as clean, in fact spewed up to 40 times the permissible limits of nitrogen oxide during normal driving, but this was hidden during emissions testing. By imposing the fine, and accepting Volkswagen's agreement to be overseen by a federal monitor, the judge accepted the deal between the government and the company.

In addition to the criminal penalty, which it agreed to under the plea agreement, VW will pay a separate $1.5 billion civil penalty.

Larry Thompson, a deputy attorney general under former President George W. Bush, has been named to lead the independent monitoring team at Volkswagen, Assistant U.S. Attorney John Neal said.

The district court judge in Detroit also placed the German auto maker on three years of probation, settling the United States criminal case over the scandal that has roiled the firm since 2015.

As well as accepting the agreement reached between VW and the US government, Cox rejected separate calls from lawyers representing individual VW customers for restitution.

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Volkswagen's general counsel Manfred Döss said the auto maker "deeply regrets the behavior that gave rise to this case".

"This conduct was not consistent with the values of this company and plain and simple it was wrong. We let people down and for that we are deeply sorry", Mr. Döss said.

VW attorney Jason Weinstein says the criminal fine is an "appropriate and serious sanction". USA prosecutors said in January that five of the seven are believed to be in Germany.

About 590,000 diesel vehicles in the USA were sold that included a so-called defeat device to make their emissions seem lower than they were on tests mandated by the Environmental Protection Agency and the California Air Resources Board.

Judge Cox denied requests from some Volkswagen customers for restitution as part of the criminal case.

Volkswagen's criminal penalty for its emissions scandal is getting closer to reality.

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