By William Boston 

The U.S. Federal Trade Commission alleged in a new federal district court filing that Volkswagen AG erased or lost 23 mobile phones of key employees, calling the lost phones a "bright red flag" in the wake of last year's disclosure of the car maker's decadelong emissions-cheating scandal.

The allegation was contained in a motion filed with the federal district court in San Francisco. U.S. authorities charged the company in September 2015 with violating the Clean Air Act.

Volkswagen declined to comment beyond its court filing in response to the FTC.

"In the context of the massive scandal at the center of this case, twenty-three lost or bricked phones is a bright red flag, especially when they include phones that belonged to important individuals," according to the filing by Jonathan Cohen, a lawyer with the Division of Enforcement of the FTC's Bureau of Consumer Protection. A bricked phone is one that can't be turned on.

The FTC in March filed a civil complaint in federal court to seek damages for consumers, alleging that Volkswagen "deceived consumers" with its "clean diesel" advertising campaign. The motion it has filed with the federal district court seeks an additional half day of testimony to support its case.

Volkswagen's attorneys dismissed the FTC arguments and said the commission was trying to use this case to put pressure on separate talks over a settlement for owners of 3.0 liter diesel vehicles which are still under way. In June, Volkswagen agreed to a $14.7 billion settlement affecting owners of 2.0 liter diesel vehicles.

In March, a former employee named Daniel Donovan alleged in a lawsuit filed in Michigan that he was fired when he tried to stop Volkswagen employees from deleting data after the company had been ordered to preserve all data and documents.

Mr. Donovan alleged that Volkswagen's information-technology department didn't stop routine deletion of data at its data center in Auburn Hills, Mich., for three days after the Environmental Protection Agency's disclosure of emissions-cheating.

Volkswagen declined to comment on the allegations, saying only that the circumstances of Mr. Donovan's termination of employment were "unrelated to the diesel issue."

Mr. Donovan later withdrew his lawsuit.

At the time he filed his suit, Mr. Donovan's attorney declined to comment.

In June, German prosecutors in Braunschweig, which is near Volkswagen's headquarters, opened an investigation of an unnamed member of the car maker's legal department, alleging that for several weeks after the EPA's announcement the member of the legal team encouraged employees to destroy or remove documents containing any information related to the diesel scandal.

Volkswagen said at the time that the employee had been suspended pending the outcome of the investigation.

The FTC investigative lawyers said a witness designated by Volkswagen Group of America for deposition testimony in August didn't sufficiently answer questions about how Volkswagen handled its responsibility to preserve evidence in the wake of disclosure of the diesel scandal.

A Justice Department trial attorney said in a letter to Volkswagen's outside lawyer that the witness "was either unprepared or otherwise unable to provide responsive information to certain topics." The witness "answered 'I don't know' or some variation thereof over 250 times, including in response to questions he should have been able to answer," the FTC said in the filing.

The FTC motion says that Volkswagen "goes to some lengths to downplay the significance of the lost or bricked phones." The phones were assigned to employees of Volkswagen's U.S. subsidiary.

The FTC requested additional testimony from Volkswagen's witness in a motion filed on Nov 30.

Volkswagen filed a rebuttal to that request on Dec. 1, asking the court to deny the FTC's request. Attorneys for Sullivan & Cromwell, representing Volkswagen, argued in their brief that preparation of the witness had been "extraordinarily thorough" and that the witness "spent 20 days preparing for this one deposition." Volkswagen's attorney said the witness answered "thousands of questions" by five examiners.

The commission said in its filing that Volkswagen had determined there was no concern about data destruction, but had failed to provide any evidence as to how it came to that conclusion.

The FTC argues that it "should not have to accept VW's assurance that there is nothing to see and that we should just move along."

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

December 10, 2016 06:21 ET (11:21 GMT)