On Monday, the U.S. Justice Department filed a civil lawsuit against the multinational automotive manufacturing firm, alleging that the company illegally installed a device to their 600, 000 units.
"We're alleging that they knew what they were doing, they intentionally violated the law and that the consequences were significant to health", said one senior Justice Department official. According to the lawsuit, the company is liable for up to $32,500 or $37,500 per vehicle depending on the time of the violation.
"Car manufacturers that fail to properly certify their cars and that defeat emission control systems breach the public trust, endanger public health and disadvantage competitors", said John Cruden, assistant attorney general for the US Justice Department's environment and natural resources division.
FRANKFURT, Germany (AP) - Shares in Volkswagen AG are sliding after the U.S. Justice Department sued the German automaker over emissions-cheating software fitted to diesel vehicles.
After the regulator uncovered the scandal in September, VW admitted installing the software, which was created to trick regulators into believing its cars were less polluting than they really were by producing low emissions only when undergoing official tests, in more than 11m vehicles across the world.
During December, VW's shares had been recovering as the carmaker announced incrementally positive news such as simple fixes for about 8.5 million affected cars in Europe.
Volkswagen could potentially face up to £61 billion ($90 billion) in fines.
If ever proven that the allegations are true, Volkswagen, along with its Porsche and Audi models could possibly be facing an enormous penalty.
To cheat the emissions controls, VW installed software that allowed the vehicles to detect when they were being tested on a flatbed.
The suit, filed Monday in federal court in Detroit, does not involve any criminal charges, nor does it call out any executives or corporate heads, but the New York Times reports that many public health and environmental advocates are pushing the government to follow up with more serious charges.
Though the company had earlier promised that it would continue to work cooperatively with the EPA on developing remedies to bring the affected vehicles into full compliance with regulations as soon as possible.
"We will continue to cooperate with all government agencies investigating these matters", the Volkswagen spokesperson said in a statement.