Image copyright Associated Press Image caption A Volkswagen engineer pleads guilty

A Volkswagen engineer has pleaded guilty to involvement in the German carmaker's diesel emissions scandal.

He is the first to be charged as part of the US Justice Department's year-long criminal probe into the firm's rigging of federal air-pollution tests.

James Liang pleaded guilty to violation of the clean air act, a wire fraud count and a consumer fraud count.

Volkswagen has already agreed to spend up to $16bn (£12bn) to address environmental, state and owner claims.

Mr Liang, who is a German national, worked in VW's diesel development department in Germany from 1983 to May 2008, before moving to the US.

He was part of a team of engineers based in Ann Arbor, Michigan that conducted emissions tests on the diesel engine at the heart of the controversy.

He could face five years in prison although by cooperating with the US federal government, he could reduce his jail time.

His trial will be held in January.

The scandal blew up after an investigation found that many Volkswagen cars being sold in America had software in diesel engines that could detect when they were being tested.

The so-called "defeat device" changed the performance of the engines accordingly to improve results.

The German car giant has admitted cheating emissions tests in the US.

Analysis: Theo Leggett, BBC Business Correspondent

Mr Liang is the first VW employee to face charges over the emissions cheating affair, but he almost certainly won't be the last.

One word that is repeated time and time again in the indictment is "conspiracy". Clearly, he didn't work alone. And since he is now cooperating with prosecutors, others are bound to find themselves in the firing line.

The question, as ever, is just how high did the conspiracy go? Mr Liang was an engineer. His title, which now seems deliciously ironic, was "Leader of Diesel Competence".

But were any of the senior suits involved? We still don't know.

What is clear is that in many ways this alleged conspiracy was pretty clumsy.

The indictment quotes from emails in which engineers first congratulate themselves on the success of a defeat device, then later search for ways to deal with queries from regulators about excessive emissions.

Among the increasingly panicked comments: "We need a story for the situation!", and later "We still have no good explanations!!!"