According to a joint investigation by the Suddeutscher Zeitung newspaper, and the NDR and WDR television networks, Hatz was arrested earlier this week by prosecutors in Munich who are investigating the affair on behalf of the German government.
Hatz is not the first Volkswagen Group employee arrested over the Dieselgate scandal, but, if this report proves to be true, he is the most senior to date.
Audi plans to roll out more than 20 electrified vehicles before 2025, with about a dozen created to be battery-only, development chief Peter Mertens said, mirroring the zero-emissions push by parent VW. The former engine boss is said to be a close friend and confidant of Martin Winterkorn, the Group's former CEO. The complaint against him alleged that he directed other employees to design the software that cheated on USA emissions tests, and that he and others failed to disclose the software and knowingly misrepresented that the engines complied with pollution standards.
In 2011, Hatz joined Porsche as its head of research and development. A year later, a hefty severance package was worked out, although it's understood he will have to pay this money back should he be successfully convicted.
The former Audi manager, Italian citizen Giovanni Pamio, was subsequently arrested by Munich prosecutors on suspicion of fraud and false advertising in connection with the carmaker's emissions scandal.