German prosecutors investigating former Volkswagen CEO for fraud

German prosecutors said on Friday that they are investigating Volkswagen's former chief executive Martin Winterkorn on suspicion of fraud, looking into when he first knew that the carmaker was rigging diesel emissions tests.

It is the second investigation into Winterkorn's role in the scandal by prosecutors in the German town of Braunschweig near Volkswagen's (VW) Wolfsburg headquarters.

Winterkorn is already being investigated over possible market manipulation.

In September 2015, VW admitted that it had used software to reduce emissions levels when cars were being tested in the US. This wiped billions of euros from VW's market value and forced Winterkorn to resign.

US investigators and German media have alleged that VW executives knew of the scandal as far back as July 2015, but decided to say nothing.

Appearing before German lawmakers last week, Winterkorn said he did not have knowledge of the cheating prior to VW's official admission.

However, investigators said on Friday they have sufficient evidence indicating that Winterkorn may have been aware of the situation earlier than he has let on.

They also said 28 homes and offices have been searched as part of the investigation this week and the number of people accused in connection with the "dieselgate" emissions scandal had risen to 37 from 21.