VW admitted in September 2015 to installing secret software in hundreds of thousands of U.S. diesel cars to cheat exhaust emissions tests and make them appear cleaner than they were on the road, and that as many as 11 million vehicles could have similar software installed worldwide.
In 2014, as U.S. suspicions increased about the real level of emissions from VW diesel cars, engineers and supervisors plotted ways to hide the defeat device, according to court documents. The next year, when regulators threatened not to certify 2016 models for sale in the U.S., Volkswagen's senior officials in Wolfsburg, Germany, were told at a July 27 meeting about the deception.
Senior VW managers approved a plan in August 2015 for what the automaker's employees would say in an upcoming meeting with California regulators, prosecutors allege. That plan called for Volkswagen employees to continue concealing the existence of the emissions device.
The settlement pushes the cost of the scandal to more than $23 billion in the U.S. and Canada and will force the company to increase the money set aside to pay fines and compensate affected customers, which currently totals 18.2 billion euros ($19.1 billion).
VW, which plans to post a provision in the fourth quarter of 2016, has the resources to absorb the costs. The company had net liquidity of $32.6 billion in the automotive division at the end of the third quarter, and extended a $21 billion bridge loan facility through mid-2017 to provide an additional financial cushion and protect its credit rating.
Reuters and Bloomberg contributed to this report