A US judge has ordered Volkswagen to pay a US$2.8 billion (AUS$3.7 billion) criminal penalty for cheating on diesel emissions tests, blessing a deal negotiated by the government for a “massive fraud” orchestrated by the German automaker.

District Judge Sean Cox stuck to the plea deal during the sentencing hearing, six weeks after VW pleaded guilty to conspiracy and obstruction of justice in a bold scheme involving nearly 600,000 diesel cars in the US.

They were programmed to turn on pollution controls during testing and off while on the road.

“It was an intentional effort on the part of a major corporation to evade US law and lie to U.S. regulators,” Assistant US Attorney John Neal told the judge.

Speaking from the bench in the heart of the global auto industry, Mr Cox said he was amazed that VW would commit such a crime.

“Who has been hurt by this corporate greed? From what I can see it’s not the managers at VW, the ones who get paid huge salaries and large bonuses,” he said.

“As always it’s the little guy,” the judge said, referring to car buyers and VW’s blue-collar workers who might earn less in the future.

Separately, VW is paying US$1.5 billion in a civil case, mostly to settle allegations brought by US environmental regulators, and spending US$11 billion to buy back cars and offer other compensation.

Seven employees have also been charged with crimes in the US, but five are in Germany and are unlikely to be extradited.

Volkswagen not the same company, lawyer says

In brief remarks to the judge, VW defence attorney Jason Weinstein says the criminal fine is an “appropriate and serious sanction.”

VW general counsel Manfred Doess said the company is not the same one that was caught 18 months ago.

“Volkswagen deeply regrets the behaviour that gave rise to this case … Plain and simple it was wrong,” Mr Doess said.

“We let people down and for that we’re deeply sorry.”

VW pleaded guilty to conspiracy and obstruction of justice in a bold scheme involving nearly 600,000 diesel cars in the US.

Neal disclosed that a former Justice Department official, Larry Thompson, will serve as a monitor to ensure that VW complies with the plea agreement, which includes three years of probation and complete future cooperation with any inquiries by investigators.

US regulators confronted VW about the cheating software after West Virginia University researchers discovered differences in testing and real-world emissions of harmful nitrogen oxide.

VW eventually admitted that the cars were programmed to turn pollution controls on during testing and off while on the road.

— AP