Tresa Baldas, Robert Allen, and Brent Snavely

Detroit Free Press

Just as the North American International Auto Show kicks off in Detroit, a Volkswagen executive has been charged with conspiracy for his alleged role in the German automotive company's emissions scandal, according to a criminal complaint unsealed this morning in U.S. District Court in Detroit

The criminal case surfaced just as Volkswagen and Audi were preparing to reveal new cars and SUVs at the highly anticipated auto show, which got under way over the weekend but opens to the public on Saturday.

According to the criminal complaint, Oliver Schmidt, a VW general manager who was stationed in Auburn Hills and oversaw the company's Environmental and Engineering office, "knowingly participated in a conspiracy" that defrauded both U.S. and Volkwagen customers by rigging cars to cheat emissions tests. The complaint cited the ongoing emissions scandal, noting that U.S. regulators in 2015 had discovered that VW diesel vehicles had substantially higher emissions when driven – even though they passed U.S. emissions tests – and "repeatedly asked VW for an explanation for this discrepancy."

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"Schmidt knew that the reason for this discrepancy was that VW had intentionally installed software in the diesel vehicles in sold in the U.S. ... designed to detect and cheat U.S. emissions tests," the complaint stated.

Moreover, the complaint alleged, Schmidt knew all this but still deceived U.S. regulators in "direct conversations" by offering reasons for the discrepancy "other than the fact that VW was intetentionally cheating on U.S. emissions tests in order to allow VW to continue to sell diesel vehicles in the United States."

The German automaker has previously admitted to trying to beat emissions tests and is paying about $11 billion to buy back diesel vehicles and to compensate owners.

"Volkswagen continues to cooperate with the Department of Justice as we work to resolve remaining matters in the United States. It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters," the company said in a statement emailed to the Free Press.

Schmidt, who was arrested in Florida on Saturday, will be arraigned in Miami this afternoon, according to U.S. Attorney Barbara McQuade, whose office is handling the case.

At Audi's press conference, executives said Volkswagen's luxury brand set sales records in both the U.S. and globally, but also said 2016 was a "challenging year."

"We are going to focus on our business model. It's what our dealers want, its what employees want, its what our customers want," Scott Keogh, president of Audi of America said after the automaker's press conference at the Detroit auto show. "What happened ... frankly I have no comment. I know we are negotiating, I know we are working through this."

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The FBI's investigation involves two unnamed cooperating witnesses and a third VW employee, James Liang, who pleaded guilty in September to conspiracy for his role in the emissions scandal. As part of his plea agreement, he agreed wto cooperate with the government's investigation in exchange for possible leniency at sentencing.

Return to Freep.com for more on this developing story.

Tresa Baldas can be contacted at tbaldas@freepress.com. Follow her on Twitter @Tbaldas