Environmentalists said the plan - nearly two years after Volkswagen admitted to cheating USA diesel emissions tests - was too little, too late.
In a superseding criminal information, federal prosecutors charged Mr. Schmidt with one count of conspiracy to defraud the USA, commit wire fraud and violate the Clean Air Act.
Mr. Schmidt reported to Heinz-Jakob Neusser, the former head of engine development at Volkswagen, who is among eight Volkswagen executives to be charged in the United States.
James Liang, a VW employee who pleaded guilty to misleading regulators, is cooperating with prosecutors and will be sentenced on August 25.
Schmidt when entering his guilty plea said he did not disclose those devices to officials during multiple telephone calls, meetings and filings.
However, U.S. District Court Judge Sean Cox reminded Oliver Schmidt today in federal court that he will decide Schmidt's prison sentence and the amount of the fines at his sentencing on December 6 in Detroit.More news: Revenue Growth Analysis of Wal-Mart Stores Inc. (WMT)
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Under terms of a plea agreement with federal prosecutors, Mr. Schmidt faces up to seven years in prison and a fine ranging between $40,000 and $400,000.
Some 11 million cars worldwide were equipped with the software, including more than 105,000 sold in Canada. In the US alone, legal settlements could cost Volkswagen more than $25 billion, depending on how many vehicles the auto maker ends up repurchasing to compensate consumers.
Oliver Schmidt, a German national, pleaded guilty to two charges in the case: conspiracy to defraud the United States to commit wire fraud and to violate the Clean Air Act; and for violating the Clean Air Act. He is to be sentenced on December 6.
Mr. Schmidt has been behind bars in MI and had planned to stand trial before agreeing to plead guilty.
The software detected when cars were being tested and turned the emission controls off during normal driving. For several years, Schmidt shepherded Volkswagen's vehicles through a diesel emission certification process and said the company's vehicles met regulatory standards.
Most of the Volkswagen executives charged are in Germany and may not travel to the United States since Germany typically does not extradite its citizens.