A judge for the US District Court for the Northern District of California on Monday approved [order, PDF] a $1.2 billion settlement [materials] with Volkswagen (VW) [corporate website] dealers. The 650 US dealers will receive payments over the course of 18 months. VW North American Chief Executive Officer Hinrich Woebcken said [Reuters report] said the deal “is a very important step in our commitment to making things right for all our stakeholders in the United States.” The settlement is valued at more than $1.2 billion, which includes $175 million in sales incentives and $270 million in prior payments. VW has agreed to pay up to $22 billion in the US to address the claims from states, environmental regulators and owners.

VW has been steeply penalized internationally for a scandal [JURIST op-ed] that saw the automaker cheat emissions standards with software designed to fool testing equipment. Last week corporate executive Oliver Schmidt was arrested [JURIST report] by the FBI on charges that he had conspired to defraud the US. VW faces sanctions in South Korea, Spain, Germany and Australia in addition to other sanctions [JURIST reports] in the US. The EU announced [JURIST report] in December a plan to hold member nations accountable for VW’s fraud, increasing the likelihood that other states may be added to the list of those suing the automaker.