In the wake of Volkswagen’s truly astonishing admission of wrongdoing, Martin Winterkorn, the chief executive of the world’s No. 1 carmaker, stepped down on Wednesday. This should be only the beginning of the consequences. The U.S. government must show that it will not tolerate systematic and brazen lawbreaking. It can — and should — pursue both heavy fines against the company and criminal charges against individual executives.

The U.S. government has accused Volkswagen of installing a “defeat device” on nearly half a million cars in the United States — and 11 million worldwide — over seven model years, designed to trick emissions inspectors. The result is hundreds of thousands of cars on the road spewing air pollutants at levels up to 40 times the legal limit. Volkswagen formally apologized on Sunday and announced that it would commission an independent investigation. That’s too little, too late.

Since the 2009 model year, Volkswagen has apparently sold “clean diesel” cars that are anything but. A tricky algorithm written into the voluminous lines of code that control onboard computers could sense when government inspectors were examining the car and switch on pollution controls. At other times, the software switched off the pollution-reduction features, increasing the car’s fuel efficiency and zip but releasing harmful exhaust. In other words, the Environmental Protection Agency (EPA) found, the company falsely claimed to be producing cars that could deliver high performance while meeting pollution standards, in the process cheating buyers and competing unfairly against honest auto manufacturers.

According to the EPA, this is a story of flagrant, baldfaced criminality, and of misleading regulators until cornered. VW at first attributed emissions discrepancies to technical glitches. But when the EPA performed follow-up tests, it concluded that none of VW’s explanations made sense. The company confessed only after the EPA threatened not to certify VW’s 2016 models for sale.

The impact of Volkswagen’s cheating is potentially much bigger than dealing with half a million dirty cars, or even one big auto company’s shattered reputation. Government emissions inspectors rely on automakers to equip their cars with computers that make everyday auto inspections quick and easy, saving the government money and drivers time. Volkswagen’s cheating undermines the notion that the readings cars spit out or the emissions regulators track in other circumstances are reliable, demanding that regulators rethink how they operate.

We can only hope that the fact VW got caught — and the imposition of heavy punishments — will deter more cheating in the future. The company faces a potential maximum fine of $18 billion, a prospect that caused its stock price to crash this week. Throwing the book at the firm and its executives would serve a clear purpose: to make cheating too financially and personally risky for those tempted in the future.

Meanwhile, the EPA also deserves blame. The agency must explain why it took so long to gather evidence and shut down VW’s cheating. It admitted that it began closely scrutinizing the company’s diesel cars only after a West Virginia University study found emissions anomalies. That’s unacceptable.