Former VW CEO Martin Winterkorn created a climate of fear encouraging cheating, says paper.

As an internal investigation gets underway, several Volkswagen engineers have acknowledged rigging emissions tests, among other things by adjusting tire settings and using non-standard oil.

A culture of fear may have driven Volkswagen’s emissions test cheating, according to a new report in the German paper, Bild am Sonntag, Volkswagen engineers afraid of what would happen if they couldn’t meet former CEO Martin Winterkorn’s aggressive CO2 targets.

Meanwhile, a separate report out of Germany indicates some VW managers are now reluctant to come to the U.S. fearing they could get caught up in an ongoing criminal probe by the Justice Department. At least one employee reportedly had his passport taken during a visit to the States.

In September, the U.S. Environmental Protection Agency reported VW cheated on emissions testing involving 482,000 vehicles equipped with a 2.0-liter diesel engine. The maker has acknowledged the problem and revealed it affects 11 million vehicles sold worldwide.

Last week, the EPA alleged VW also cheated on tests involving the 3.0-liter diesel used in a mix of products sold by Audi and Porsche, as well as the Volkswagen brand. While the carmaker denied that charge it did announce it had uncovered “irregularities” involving 800,000 other vehicles, some using gasoline engines.

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VW expects to take as much as a year to complete a fix on its 2.0-liter diesel models.

According to Bild, the various schemes began to unravel last month when an engineer in the R&D department revealed his role in the cheating. Other employees have since come forward under a program in which lower-level staff have been told they would not be punished for misconduct – though the paper says high-level managers will still be held accountable.

A number of top executives have so far been suspended, including the R&D chiefs for both the VW and Audi brands. Former CEO Martin Winterkorn resigned shortly after the scandal broke, but it was only last month that he relinquished his other roles at the company.

It was Winterkorn who set aggressive emissions targets for Volkswagen, declaring in March 2012 a goal of cutting corporate-wide CO2 output by 30% by 2015. Insiders tell TheDetroitBureau.com that there was a fear of presenting bad news to the CEO who would routinely upbraid staff members who disappointed him in front of their colleagues. Those who failed, for whatever reason, were also routinely demoted or fired.

According to Bild, in one particular incident, VW engineers tried to meet emissions standards by adjusting tire pressure and by using non-standard motor oil to reduce fuel consumption. In turn, that lowered total emissions.

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VW faces as much as $18 billion in fines for the 2.0-liter diesel cheating in the U.S. alone, and any additional revelations could boost that penalty. It also is facing at least 300 separate lawsuits in the U.S. linked to the scandal.

Criminal investigations are underway in a number of countries, including Germany and the U.S., and the Suddeutsche Zeitung is reporting that the maker is limiting travel across the Atlantic for those who might find themselves targeted by investigators. At least one VW employee has been prevented from leaving the U.S. after having his passport confiscated.

The automaker claims its employees are still traveling to the United States, however, and calls the report, “speculation.”

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