WASHINGTON/DETROIT (Reuters) - A federal judge in Detroit sentenced former engineer James Liang to 40 months in prison on Friday for his role in Volkswagen AG’s (VOWG_p.DE) multiyear scheme to sell diesel cars that generated more pollution than U.S. clean air rules allowed.

FILE PHOTO - An American flag flies next to a Volkswagen car dealership in San Diego, California, U.S. September 23, 2015. REUTERS/Mike Blake/File Photo

U.S. District Court Judge Sean Cox also ordered Liang to pay a $200,000 fine, 10 times the amount sought by federal prosecutors. Cox said he hoped the prison sentence and fine would deter other auto industry engineers and executives from similar schemes to deceive regulators and consumers.

Liang was part of a long-term conspiracy that perpetrated a “stunning fraud on the American consumer,” Cox said, as the defendant’s family looked on in the courtroom. “This is a very serious and troubling crime against our economic system.”

Liang pleaded guilty earlier this year to misleading regulators, and had cooperated with U.S. law enforcement officials investigating Volkswagen.

Prosecutors last week recommended that Liang, 63, receive a three-year prison sentence, reflecting credit for his months of cooperation with the U.S. investigation of Volkswagen’s diesel emissions fraud. Liang could have received a five-year prison term under federal sentencing guidelines. Liang’s lawyers had asked for a sentence of home detention and community service.

Liang can appeal the sentence, Cox said.

Volkswagen pleaded guilty in March to three felony charges under an agreement with prosecutors to resolve the U.S. criminal probe of the company itself. It agreed to spend as much as $25 billion in the United States to resolve claims from owners and regulators and offered to buy back about 500,000 vehicles.

Volkswagen has admitted that it used software to deceive regulators in the United States and Europe from 2006 to 2015.

The ruse allowed the automaker to sell diesel-equipped cars and sport utilities without installing emissions control systems that could have compromised performance or posed an inconvenience to customers, prosecutors charged.

Prosecutors said the deception lasted a decade and first impacted vehicles in the 2009 model year in the United States.

The German automaker declined to comment on Liang’s sentence on Friday. “Volkswagen continues to cooperate with investigations by the Department of Justice into the conduct of individuals. It would not be appropriate to discuss personnel matters,” the company said in a statement.

Liang’s lawyer, Daniel Nixon, on Friday urged Cox to consider a sentence of house arrest, saying Liang was not a “mastermind” of the emissions fraud. Liang “blindly executed a misguided loyalty to his employer,” Nixon said.

Federal prosecutor Mark Chutkow countered that Liang was a “pivotal figure” in designing the systems used to make Volkswagen diesels appear to comply with U.S. pollution standards, when instead they could emit up to 40 times the allowed levels of smog-forming compounds in normal driving.

A prison term “would send a powerful deterrent message to the rest of the industry,” Chutkow said.

Liang is still employed by Volkswagen but no longer works as an engineer.

U.S. prosecutors have charged eight current and former Volkswagen executives in connection with the diesel emissions cheating probe. Liang is one of the lowest-ranking executives charged so far.

Another VW executive, Oliver Schmidt, has pleaded guilty and is scheduled to be sentenced in Detroit on Dec. 6. Under a plea agreement, Schmidt could face up to seven years in prison and a fine of between $40,000 and $400,000 after admitting to conspiring to mislead U.S regulators and violating clean air laws.</s>DETROIT — A Volkswagen engineer was sentenced on Friday to 40 months in prison for his role in the German automaker’s decade-long scheme to cheat on federal emissions tests for diesel-powered cars sold in the United States.

The engineer, James Liang, is the first company employee sent to prison in the vast scandal that has tainted Volkswagen’s reputation and cost it more than $20 billion in fines and settlements with consumers.

Mr. Liang, who helped develop the software that concealed high levels of pollutants generated by Volkswagen’s diesel engines, reached a plea deal with prosecutors last year after agreeing to assist in the government’s investigation of the company.</s>DETROIT — A Volkswagen engineer who had a key role in the company's diesel emissions scandal was sentenced Friday to more than three years in prison and a $200,000 fine, a steeper punishment than prosecutors requested.

James Robert Liang, 63, knew the German automaker was cheating and worked to cover it up, U.S. District Court Judge Sean Cox said during the sentencing hearing in Detroit. The judge imposed a 40-month prison sentence.

"The conspiracy perpetrated a massive ... and stunning fraud on the American consumer that attacked and destroyed the very foundation of our economic system," Cox said.

Liang, who faces deportation to Germany upon his release from prison, declined to speak on his own behalf Friday. Prosecutors had requested a 36-month prison term and a $20,000 fine.

Prosecutors said Liang was aware that VW used software to cheat U.S. emission rules on nearly 600,000 diesel vehicles. His lawyer said he's not "greedy or immoral" but followed orders to keep his job and support his family.

"What occurred here was wrong," defense attorney Daniel Nixon said. "But he wasn't the mastermind. He was not motivated by greed."

Liang pleaded guilty last year to one count of conspiracy to defraud the government and agreed to cooperate with investigators. Liang had asked the judge to consider a sentence of probation and 1,500 hours of community service.

He is one of two VW employees to plead guilty, although others charged in the case are in Germany and out of reach.

Volkswagen and U.S. environmental regulators announced agreement last month on a plan for the automaker to fix most of the diesel cars involved in the emissions cheating scandal.

Volkswagen has admitted that the cars were sold with illegal software programmed to turn on emissions controls during government lab tests and turn them off while on the road. Investigators determined that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems in humans.

The company got away with the scheme for seven years until independent researchers reported it to government regulators.

This story has been updated to restore Liang's first name, James.</s>DETROIT — A Volkswagen engineer who had a key role in the company's diesel emissions scandal was sentenced Friday to more than three years in prison and a $200,000 fine, a steeper punishment than prosecutors requested.

James Robert Liang, 63, knew the German automaker was cheating and worked to cover it up, U.S. District Court Judge Sean Cox said during the sentencing hearing in Detroit. The judge imposed a 40-month prison sentence.

"The conspiracy perpetrated a massive ... and stunning fraud on the American consumer that attacked and destroyed the very foundation of our economic system," Cox said.

Liang, who faces deportation to Germany upon his release from prison, declined to speak on his own behalf Friday. Prosecutors had requested a 36-month prison term and a $20,000 fine.

In this 2016 file photo, Volkswagen engineer James Robert Liang, left, leaves court, in Detroit, after pleading guilty to one count of conspiracy in the company's emissions cheating scandal. U.S. prosecutors are seeking a three-year prison sentence for a Volkswagen engineer who had a key role in the company's diesel emissions scandal. Liang is scheduled to be sentenced Friday, Aug. 25, 2017, in Detroit federal court. He is one of two VW employees to plead guilty, although others charged in the case are in Germany and out of reach.

Prosecutors said Liang was aware that VW used software to cheat U.S. emission rules on nearly 600,000 diesel vehicles. His lawyer said he's not "greedy or immoral" but followed orders to keep his job and support his family.

"What occurred here was wrong," defense attorney Daniel Nixon said. "But he wasn't the mastermind. He was not motivated by greed."

Liang pleaded guilty last year to one count of conspiracy to defraud the government and agreed to cooperate with investigators. Liang had asked the judge to consider a sentence of probation and 1,500 hours of community service.

He is one of two VW employees to plead guilty, although others charged in the case are in Germany and out of reach.

Volkswagen and U.S. environmental regulators announced agreement last month on a plan for the automaker to fix most of the diesel cars involved in the emissions cheating scandal.

Volkswagen has admitted that the cars were sold with illegal software programmed to turn on emissions controls during government lab tests and turn them off while on the road. Investigators determined that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems in humans.

The company got away with the scheme for seven years until independent researchers reported it to government regulators.</s>One of the first Volkswagen employees to be sentenced in the Dieselgate scandal has been handed a lengthy prison term by U.S. District Court Judge Sean Cox.As Automotive News reports, Judge Cox sentenced former Volkswagen engineer James Liang to 40 months in prison. The 63-year old will also be forced to pay $200,000 for his role in the emissions cheating scandal which still continues to reverberate today.Liang was facing a prison sentence of up to five years for conspiracy but he cooperated with the investigation and prosecutors said he "provided an insider's perspective of a company that had lost its ethical moorings in pursuit of increased market share and corporate profits."Despite his cooperation, Judge Cox told Liang he committed a "serious crime" that "involves a massive fraud on the American consumer, which you knew, and you played a role in." As a result, he sentenced Liang to prison for even longer than what prosecutors had originally asked for.The Judge says he hopes this sentence will send a message to others in the automotive industry, especially those who might be asked to do something illegal for their employers.Additional Volkswagen employees are in the crosshairs as former executive Oliver Schmidt will be sentenced in December. He faces up to seven years in prison and fines up to $400,000</s>A Volkswagen engineer was sentenced Friday to 40 months in prison for his role in the diesel emissions cheating scandal, which severely tarnished the German automaker’s reputation.

US District Judge Sean Cox issued the sentence in a Detroit court against 63-year-old James Liang, who was also fined $200,000, Xinhua reported.

Liang has been cooperating with U.S. authorities and pleaded guilty last year to a charge of conspiracy.

“Your cooperation and regret is noted, but it doesn’t excuse your conduct,” Cox told Liang.

The judge said Liang was “an important and key player in a very serious crime,” who helped devise software that cheated emissions tests.

The illegal software was designed to turn on emissions controls to pass government tests and turn them off while on the road. Nearly 600,000 diesel vehicles were reportedly tampered with over the past decade.

Besides Liang, six other current and former Volkswagen executives have also been indicted. The German automaker was forced to pay tens of billions in fines and civil penalties.</s>DETROIT - A Volkswagen engineer who had a key role in the company's diesel emissions scandal was sentenced Friday to more than three years in prison and a $200,000 fine, a steeper punishment than prosecutors requested.

 

 James Robert Liang, 63, knew the German automaker was cheating and worked to cover it up, U.S. District Court Judge Sean Cox said during the sentencing hearing in Detroit. The judge imposed a 40-month prison sentence.

 

 "The conspiracy perpetrated a massive...and stunning fraud on the American consumer that attacked and destroyed the very foundation of our economic system," Cox said.

 

 Liang, who faces deportation to Germany upon his release from prison, declined to speak on his own behalf Friday. Prosecutors had requested a 36-month prison term and a $20,000 fine.

Prosecutors said Liang was aware that VW used software to cheat U.S. emission rules on nearly 600,000 diesel vehicles. His lawyer said he's not "greedy or immoral" but followed orders to keep his job and support his family.

"What occurred here was wrong," defense attorney Daniel Nixon said. "But he wasn't the mastermind. He was not motivated by greed."

Liang pleaded guilty last year to one count of conspiracy to defraud the government and agreed to cooperate with investigators. Liang had asked the judge to consider a sentence of probation and 1,500 hours of community service.

 

 He is one of two VW employees to plead guilty. Earlier this month, Oliver Schmidt, 48, a former manager of a VW engineering office in suburban Detroit, pleaded guilty to conspiracy and fraud charges related to the scandal. He is scheduled to be sentenced Dec. 6.

 

 VW itself pleaded guilty in March to defrauding the U.S. government and agreed to pay $4.3 billion in penalties, on top of billions more to buy back cars.

►Related: Judge sentences Volkswagen to $2.8B criminal fine for emissions cheating

 

 Others charged in the case are in Germany and out of reach.

 

 Volkswagen and U.S. environmental regulators announced agreement last month on a plan for the automaker to fix most of the diesel cars involved in the emissions cheating scandal.

 

 Volkswagen has admitted that the cars were sold with illegal software programmed to turn on emissions controls during government lab tests and turn them off while on the road. Investigators determined that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems in humans.

 

 The company got away with the scheme for seven years until independent researchers reported it to government regulators.</s>A Volkswagen engineer who had a key role in the company's diesel emissions scandal has been sentenced to more than three years in prison and fined $200,000.

The sentence handed down Friday in Detroit was steeper than prosecutors requested for Robert Liang.

During the hearing, U.S. District Court Judge Sean Cox said Liang knew the German automaker was cheating and worked to cover it up. The judge imposed a 40-month prison sentence.

Liang declined to speak on his own behalf Friday.

Liang had asked the judge to consider a sentence of probation and 1,500 hours of community service. He is one of two VW employees to plead guilty. Others charged in the case are in Germany but out of reach.</s>Volkswagen engineer with key role in diesel emissions scandal sentenced to more than 3 years in prison, fined $200,000.</s>An engineer who helped develop the engines at the center of the Volkswagen diesel emissions cheating scandal was sentenced today in federal court in Detroit to 40 months in prison.

The sentence for James Liang was more than the three years prosecutors had recommended but less than a possible five-year sentence.

But Judge Sean Cox appeared intent on sending a message to others in the auto industry.

Calling Liang an important member of a "massive and stunning fraud," U.S. District Court Judge Sean Cox cited the potential impact on America's economy.

"This crime is a very serious and troubling crime against our economic system," Cox said, noting that what Liang and Volkswagen had done was to undermine the trust between buyers and sellers.

Federal prosecutors had cited Liang's "substantial assistance" in recommending a term less than the maximum because Liang, 63, had been prepared to testify against co-defendant Oliver Schmidt, a former VW manager who faces a possible seven-year term when he is sentenced in December on similar charges.

Liang, a German national who has been living in California, pleaded guilty in September in U.S. District Court in Detroit to conspiracy. In addition to his prison sentence, Liang was ordered to serve two years of supervised release and pay a $200,000 fine, and he is to be deported after his sentence.

He will be allowed to surrender to authorities to begin his sentence at a later, unannounced date.

Ex-VW manager's guilty plea calls for up to 7 years in prison and $400,000 in fines

The government had described Liang in its sentencing recommendation as a "a mild-mannered, soft-spoken man who worked his entire 34-year career at VW" but also noted his connection to the diesel engines that landed the automaker in so much trouble. The government had acknowledged that Liang was not the mastermind of "Dieselgate," but said he was "one of VW’s most valuable diesel engine experts and the 'Leader of Diesel Competence' in the United States."

The case stems from the German automaker's use of so-called defeat devices that sought to cheat U.S. emissions tests. Those devices allowed the vehicles to pollute less when they were being tested. The scheme began to unravel in 2014 and later led to civil settlements worth about $17 billion for U.S. consumers and dealers who own the automaker's diesel vehicles and an additional $4.3 billion to settle criminal charges.
Former Volkswagen engineer James Liang is sentenced by U.S. District Court Judge Sean Cox to 40 months in prison and a $200,000 fine for his role in the decade-long scheme to cheat on federal emissions tests for diesel-powered cars sold in the United States. He is the first company employee sent to prison in the scandal.