Two other VW employees reportedly agreed to cooperate with investigators in exchange for immunity.

FBI agents have reportedly arrested Volkswagen's former director of regulatory compliance, Oliver Schmidt.

The German executive is the first top VW manager to face charges for an alleged role in developing and implementing the illegal 'defeat' device used in millions of vehicles globally.

He is expected to be arraigned Monday on charges of conspiracy to defraud the United States, according to a New York Times report.

Schmidt appears to have played a top role in bringing the non-compliant EA288-generation TDI engine to market.

"With the introduction of the new EA288 engine, we are excited that our family of TDI Clean Diesel vehicles is continuing to improve and will be even more clean, fuel efficient and powerful," he said in a 2013 press release ahead of the new engine's arrival in the 2015 VW Golf, Beetle, Passat and Jetta.

An affidavit accuses Schmidt of deceiving US authorities after university researchers first cried foul in 2014, prompting direct questions from the Environmental Protection Agency. He allegedly offered alternative reasons for the emissions discrepancy "other than the fact that VW was intentionally cheating on US emissions tests," allowing the company to continue selling the non-compliant vehicles in the US market.

Prosecutors are presumably attempting to find evidence of wrongdoing among Schmidt's former peers. One engineer has pled guilty and is cooperating with investigators. The latest reports suggest at least one other employee has cooperated with prosecutors in exchange for immunity.