Six senior Volkswagen employees from Germany have been charged with fraud in the US for their alleged roles in the emissions-cheating scandal.
The company itself has agreed to plead guilty to criminal charges and pay a fine of $4.3bn (£3.5bn).
The only employee under arrest over the near decade-long conspiracy was former emissions compliance manager Oliver Schmidt, who was seized over the weekend in Miami during a visit to the US. The other five remain in Germany.
Volkswagen’s multi-billion dollar penalty is by far the biggest ever levied by the US government against a car manufacturer, and the second-largest criminal environmental settlement in US history, behind only BP’s Deepwater Horizon case.
In announcing the charges and the plea bargain, Justice Department prosecutors described a large and elaborate scheme inside the car company to commit fraud and then cover it up, with at least 40 employees allegedly involved in destroying evidence.
“Volkswagen obfuscated, they denied and they ultimately lied,” Attorney General Loretta Lynch said.
The settlement comes more than a decade after the car giant began designing “defeat devices” – which it fitted onto as many as 11m vehicles – that cheated exhaust emissions tests and made cars appear cleaner than they were on the road.
In 2015, VW admitted to installing software in diesel engines on nearly 600,000 VW, Porsche and Audi vehicles that allowed the cars to spew harmful nitrogen oxide at up to 40 times above the legal limit.
“For years, Volkswagen advertised its vehicles calling them ‘clean diesel’. Our investigation has revealed they were anything but,” Ms Lynch added.
Yet prosecutors may have trouble bringing the executives to trial in the US, since German law prevents extradition of the country's citizens to countries outside the European Union.
Privately, Justice Department officials have expressed little optimism that the five VW executives still at large will be arrested, unless they surrender or travel outside Germany.
Still, the criminal charges are a major breakthrough for the Justice Department, which has faced increased pressure to press charges against individuals for corporate wrongdoing since the 2008 financial crisis.
Ms Lynch also held out the possibility of charges against more high-ranking VW executives, saying: “We will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.”
Prosecutors said even after the company admitted to fitting the defeat devices in 2015, employees were busy deleting computer files and other evidence.
VW's fine easily eclipses the $1.2bn (£820m) penalty levied against Toyota in 2014 over unintended acceleration in its cars. VW also agreed to pay an additional $154m (£126m) to California for violating its clean air laws.
The penalties bring the cost of the scandal to VW in the United States to nearly $20bn (16.4bn), not counting lost sales and damage to the car maker’s reputation.
VW also faces an investor lawsuit and criminal probe in Germany.
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