Schmidt agreed to a plea deal in October this year, and was officially given the maximum penalty this week: a seven year jail term and a US$400,000 ($525,000) fine. At his sentencing hearing in Detroit, his lawyers had argued for a more lenient punishment.
According to Reuters, US District Judge Sean Cox told Schmidt: “It is my opinion that you are a key conspirator in this scheme to defraud the United States. You saw this as your opportunity to shine ... and climb the corporate ladder at VW.”
In a statement to the court, Schmidt admitted guilt, saying, "I made bad decisions and for that I am sorry".
Schmidt was arrested during a business trip to the USA earlier this year, and charged on 11 felony counts, which could have seen him languish in detention for up to 169 years.
He was the head of the Volkswagen America engineering and environmental office in Michigan from 2012 to 2015, and was in charge of the US arm's emissions testing regime.
As part of his guilty plea, Schmidt admitted to being informed about the emissions cheating scheme, and said he conspired with other Volkswagen executives to illegally certify the company's 2.0-litre turbo-diesel engine in the States.
He met with US regulators in 2015, but did not disclose Volkswagen's illegal software mechanisms.
US prosecutors have charged eight former and current Volkswagen employees in relation to the Dieselgate scandal. Six are still at large, most protected by Germany's policy of not handing over its citizens to US authorities.
MORE: Dieselgate coverage