By David Ingram and Joel Schectman
NEW YORK/WASHINGTON (Reuters) - Volkswagen AG (VOWG_p.DE) will probably have to show there was some legitimate reason to install software that led to false vehicle emissions tests if it is to avoid U.S. criminal charges, lawyers said on Tuesday.
The German automaker has admitted to U.S. clean air regulators that in some of its diesel cars it used a so-called “defeat device,” software designed to defeat emissions tests. As a result it is almost certainly exposed to very large civil penalties that could be imposed by the U.S. government, said attorneys with expertise in environmental prosecutions though not involved in the Volkswagen case.
The criminal probe, which was confirmed by a source familiar with the matter on Tuesday, is likely to examine not only possible violations of the U.S. Clean Air Act but also of broader statutes against wire fraud, false statements to regulators and other crimes, the lawyers said.
Individual employees are also likely to be investigated and could potentially face criminal charges if wrongdoing is discovered, the lawyers added.
A Justice Department spokesman declined to comment. A Volkswagen spokesman did not respond to requests for comment on what the company's legal strategy would be.
Deliberately faking emissions results could be seen by prosecutors as a multi-layered fraud against consumers, regulators and auto dealers, the lawyers said.
But there will likely be a debate between the Justice Department and Volkswagen's legal team over what the company and its employees intended by installing the software. U.S. prosecutors generally must find evidence of intent to commit a crime - such as incriminating emails or information from cooperating witnesses - before they can charge someone.
The installation of the devices is not necessarily evidence of intentional misconduct, said Bruce Pasfield, a former environmental prosecutor.
Automakers sometimes install such devices to allow vehicles to be tested under differing standards required by overseas regulators, said Pasfield, now at the law firm Alston & Bird. "You cannot draw the conclusion that this is intentionally criminal," he said.
The Volkswagen investigation could end up as one of the first test cases of tougher new Justice Department guidelines that could lead to an increase in the number of prosecutions of corporate executives.
David Uhlmann, former chief of the Justice Department's environmental crimes section, said criminal charges were almost certain if the allegations against Volkswagen are true, but he added the company could still find a defense.