Volkswagen authorities admit that the company falsified U.S. vehicle emission tests, tricking customers into thinking they purchased powerful but low emission cars.
The U.S. Environmental Protection Agency said that Volkswagen could face penalties of up to $18 billion for cheating emissions tests. In addition, the U.S. Justice Department has launched a criminal probe of Volkswagen, a source familiar with the matter said.
Volkswagen said it would set aside 6.5 billion Euros ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts' profit forecasts.
The investigation is likely to examine not only possible violations of the Clean Air Act but also of broader statutes against wire fraud, false statements to regulators and other crimes, former prosecutors not involved with the investigation said. A Justice Department spokesman declined to comment.
This isn’t the first time Volkswagen is caught up in a controversy. In 2013 they had to recall almost thousands of Golf, Jetta, Polo, Passat and Caddy models manufactured between June 2008 and September 2011 in Australia, China, Singapore and Japan in response to potential gearbox problems.
Then their allegedly racist SuperBowl ad that landed them in trouble.
But all those controversies pale before this scandal.