Former Volkswagen boss Martin Winterkorn may be in even deeper trouble than he thought. German prosecutors are already investigating Mr. Winterkorn for possibly misleading VW investors about the Dieselgate scandal. They now also suspect possible tax evasion, the German tabloid Bild am Sonntag reported this weekend.
According to the report, state prosecutors in the city of Braunschweig have documents suggesting that Mr. Winterkorn transferred €10 million ($11.6 million) to Swiss bank accounts in 2016 and 2017. The money was was sent on a roundabout route, including via accounts held by his tax consultant.
The millions of euros ended up in accounts at the Vontobel Bank in Zurich, including one in the name of Mr. Winterkorn’s wife. Transfers to a spouse can be liable to taxation under German law, but no tax payment appears to have been made in this case.
As well as possible criminal charges on both sides of the Atlantic, it is thought possible that Volkswagen may sue Mr. Winterkorn for damages resulting from the Dieselgate scandal, in which it was revealed that VW had manipulated emissions test data to make its engines seem less polluting than they were.
So far, the scandal has cost Volkswagen more than €20 billion in fines and product recalls. If the company were to sue its former CEO, assets held in Switzerland rather than Germany could be better protected against seizure.
Responding to the reports, Mr. Winterkorn’s lawyer said the payments had been cleared with tax consultants and were completely above board. He said Mr. Winterkorn was considering legal action against prosecutors for breach of confidentiality, adding that prosecutors had no right to extend their Dieselgate investigation into Mr. Winterkorn’s private financial affairs.
Braunschweig prosecutors were unavailable for comment on Sunday. A spokesperson for the Swiss bank told Handelsblatt it complied with all banking laws and could not comment on individual client relationships.
Mr. Winterkorn became Volkswagen’s boss in 2007 but stepped down soon after news of the Dieselgate scandal broke in September 2015. He has consistently denied any prior knowledge of the company’s systematic emissions test manipulation.
Memories of a micromanager
However, his claim to have first heard of the Dieselgate fraud in September 2015 also took a blow this weekend, with the publication of testimony by his former mentor Ferdinand Piëch in late 2016. The Süddeutsche Zeitung newspaper reported that Mr. Piëch said it was “unimaginable” for Mr. Winterkorn not to have known. He pointed out that Mr. Winterkorn was known for his micromanagement, with intensive knowledge of every aspect of the company.
Mr. Piëch himself claims that he learned of the diesel manipulation early in 2015. Soon after, he says, he confronted Mr. Winterkorn about a letter from US pollution authorities demanding an end to the practice. Mr. Winterkorn denies the allegation. Handelsblatt has previously reported on an internal VW letter from May 2014, which warned of the policy’s disastrous consequences.
In May of this year, Mr. Winterkorn was indicted by a US federal grand jury on several counts of conspiracy and wire fraud related to Dieselgate. Two former Volkswagen executives are already serving prison sentences, with charges made against a total of seven others, including Mr. Winterkorn.
Michael Brächer is Handelsblatt’s Switzerland correspondent. Sönke Iwersen leads Handelsblatt team of investigative reporters. Volker Votsmeier is an investigative reporter with Handelsblatt. To contact the authors: firstname.lastname@example.org, email@example.com, firstname.lastname@example.org