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FBI said to arrest VW exec, taking emissions scandal to new level

The FBI has arrested a Volkswagen executive on charges of conspiracy to defraud the United States, The New York Times reports, citing two people with knowledge of the arrest.

The move, says the Times, marks “an escalation of the criminal investigation into the automaker’s diesel emissions cheating scandal.”

CBS News has not independently confirmed the Times report. The FBI in Detroit told CBS News early Monday it doesn’t have any comment yet.

The newspaper says Oliver Schmidt, who headed Volkswagen’s U.S. regulatory compliance office from 2014 until March 2015, was taken into custody Saturday in Florida and was expected to be arraigned in Detroit Monday.

Lawyers for Schmidt didn’t respond to requests from the Times for comment late Sunday and, the newspaper says, Justice Department officials also declined to comment.

The suits allege that Volkswagen and its affiliates Audi and Porsche over diesel emissions cheating, alleging that the German automakers defrauded customers by selling diesel vehicles equipped with software allowing them to cheat emissions testing.

Volkswagen spokesperson Jeannine Ginivan told CBS News in a statement Monday morning that the automaker “continues to cooperate with the Department of Justice” but that “it would not be appropriate to comment on any ongoing investigations or to discuss personnel matters.”

The Times says Schmidt is cited in suits filed by the New York and Massachusetts state attorneys general in July as playing an important role in the emissions scandal.

The suits allege that Volkswagen and its affiliates Audi and Porsche defrauded customers by selling diesel vehicles equipped with software enabling them to cheat emissions testing.

The Times says, “James Liang, a former Volkswagen engineer who worked for the company in California, pleaded guilty in September to charges that included conspiracy to defraud the federal government and violating the Clean Air Act. But Mr. Schmidt’s arrest brings the investigation into the executive ranks.”

“The arrest came as Volkswagen and the Justice Department neared a deal to pay more than $2 billion to resolve the criminal investigation into the emissions cheating. The company or one of its corporate entities is expected to plead guilty as part of the deal,” the newspaper adds.

In October, a federal judge in San Francisco approved a nearly $15 billion settlement of most claims against Volkswagen for its emissions-cheating scandal.

Volkswagen admitted last year that about 475,000 VWs and Audis with 2-liter four-cylinder diesel engines were programmed to cheat on emissions tests. Under the settlement, owners of the affected cars have until Sept. 1, 2018, to decide whether to have the car fixed or repurchased. Volkswagen could start buying back the cars as early as next month if the owner submits a claim. Most owners were expected to sell their vehicles back.

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