Former Audi CEO Rupert Stadler gets suspended jail sentence over VW diesel scandal

By Hanna Ziady, CNN

London (CNN) — A Munich court has handed former Audi CEO Rupert Stadler a suspended jail sentence of one year and nine months for fraud in the 2015 diesel emissions scandal that rocked Volkswagen Group.

The ex-boss was also fined €1.1 million ($1.2 million), which will go to the German government and charities, the court said in a ruling Tuesday.

Stadler is the first Volkswagen (VLKAF) board member to be sentenced in the affair, some four years after German prosecutors laid fraud charges against the executive. He entered a plea bargain with the court, confessing to his crimes in order to avoid spending time in jail. His sentence has been suspended for three years.

The court also delivered guilty verdicts against Audi’s former head of engine development Wolfgang Hatz and former lead diesel engineer Giovanni Pamio, handing them suspended jail sentences of two years, and one year and nine months, respectively. Hatz was fined €400,000 ($437,000) and Pamio was fined €50,000 ($55,000).

Audi (AUDVF) and its parent company Volkswagen admitted in 2015 to having rigged diesel engines to cheat on emissions tests by using software that made cars appear less polluting in tests than they in fact were on the road.

The scandal set off years of investigations, fines and settlements that have so far cost the carmaker roughly €33 billion ($36 billion).

The affair also led German prosecutors to charge former Volkswagen CEO Martin Winterkorn with fraud in 2019. Winterkorn has yet to stand trial.

In 2021, he agreed to pay VW €11.2 million ($12.3 million) after an internal investigation found he failed to respond properly to signs that the company may have been using illegal diesel engine technology.

Stadler, who had worked for Volkswagen since 1990, agreed to pay the company €4.1 million ($4.5 million) following the same investigation. He was arrested in June 2018 in connection with the diesel scandal.

In 2019, prosecutors said Stadler knew about the manipulation of diesel engines but failed to prevent the sale of hundreds of thousands of cars with rigged software.

The charges related to nearly 435,000 Audi, Porsche and Volkswagen cars destined for US and European markets.

In separate statements, Volkswagen and Audi said they were not party to Tuesday’s proceedings, which should be “viewed independently” of proceedings against the companies that concluded in 2018.

“Audi has made good use of the crisis as an opportunity to start over. We have updated our systems, processes and checks to ensure compliance company-wide,” Audi added, noting it had since “cultivated and strengthened a culture of constructive debate.”

German prosecutors dropped criminal charges against Volkswagen and Audi in 2018 after the companies paid nearly $2 billion in fines.

— Inke Kappeler in Berlin contributed reporting.

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