German authorities have charged the former boss of Audi with fraud as part of an investigation into the VW emissions-cheating scandal.
Rupert Stadler is also accused of false certification and criminal advertising practices.
Prosecutors claim he knew that hundreds of thousands of Audi, Porsche and VW cars contained software designed to cheat pollution tests, yet turned a blind eye.
Mr Stadler has denied wrongdoing.
The VW dieselagate scandal erupted in September 2015 when it emerged VW had installed so-called "cheat devices" in 600,000 vehicles sold in the US and millions more globally.
Since then the carmaker, which owns Audi and Porsche, has had to set aside around $30bn to cover fines and settlements.
Former VW boss Martin Winterkorn also has been charged with fraud, while many others remain under investigation.
On Wednesday, the public prosecutor's office in Munich said that Mr Stadler faced charges over the affair along with three other defendants who were not named.
'Aware of manipulations'
The prosecutor said his indictment related to roughly 250,000 Audi-branded cars, 112,000 Porsches and 72,000 Volkswagen cars that were sold in the US and Europe.
"Defendant Stadler is accused of having been aware of the manipulations since the end of September 2015 at the latest, but he did not prevent the sale of affected Audi and VW vehicles thereafter," the prosecutor said.
"Vehicles with the engines concerned were subsequently sold in large numbers and placed on the market."
Mr Stadler was arrested last June and spent time in custody as part of a wider probe into emissions cheating at Audi. Volkswagen later ended his contract citing the criminal investigation.
On Wednesday, Audi said it was in the interest of the company, its shareholders and employees to clarify the issues that led to the diesel crisis.
But it added: "Until this has happened, the presumption of innocence must prevail."
Investigations against 23 further suspects continue, the Munich prosecutor's office added.