This sounds like a tech thriller movie, but actually is an automotive business story that involves ethics, the environment, huge penalties and a top executive's resignation. Here's the plot: Since 2009, Volkswagen put a special computer program in 482,000 "clean diesel" vehicles sold in America so that pollution controls only worked when being tested for emissions. The rest of the time, the cars released much larger amounts of smog-forming compounds – as much as 40 times more than U.S. rules allow. The firm admits that 11 million of its cars worldwide, mostly in Europe, also have "defeat devices" -- software to fool regulators.

The scam was discovered in this country, where the Environmental Protection Agency announced two weeks ago that VW violated the Clean Air Act. The German-based carmaker faces potential U.S. fines of up to $18 billion – yes, billion – and must fix every affected diesel model of the Golf, Jetta, Beetle, and Passat. The Justice Department may press criminal charges. One casualty, besides the company's reputation, is chief executive Martin Winterkorn. He quit in embarrassment last week after nearly 10 years in charge.

Car buyers and regulators now wonder if other companies played fair or also cheated, spreading doubts about whether "clean diesel" vehicles really are better for the environment. "This situation does have the possibility certainly of putting another doubt in the consumers’ minds about diesels," says Jeff Schuster, an industry specialist in Troy, Mich. Governments can make cheating harder. Starting with 2017 models, European regulators will require automakers to test passenger cars on the road in addition to in lab settings. That approach would've made Volkswagen's trickery tougher.

VW director says: "The incident must be cleared up mercilessly, and it must be assured that such things cannot ever happen again. We are very much aware of the scope of this issue, the economic damage and the implications for VW's reputation." – Stephan Weil, company board member

Auto dealer says: "This is another black eye for diesels. You now have a passionate constituency that feels betrayed." -- Mike Jackson, head of AutoNation, the largest U.S. automotive retailer

Driver says: "The only time my sweet little Jetta TDI had delivered the promised 'clean diesel' performance was that day I sat in the dealer's parking lot. . . . Otherwise, it operated in full clunker mode, spewing up to 40 times the [nitrogen oxides] allowed by law." – Richard Conniff, author, in Sept. 27 guest column for The New York Times