The former boss of VW may have known the carmaker was cheating on emissions tests earlier than he admitted, German prosecutors have said.
Martin Winterkorn quit in September 2015 after VW admitted to using software to lower the emissions from its diesel vehicles during tests.
He has since denied knowing of the violations until late in August 2015, shortly before the board reported them.
But German authorities said they were now investigating him for fraud.
Prosecutors from the German region of Braunschweig said they had searched 28 homes and offices this week in connection with the scandal.
As a result, the number of people accused of misconduct had risen from 21 to 37, including Mr Winterkorn.
"Sufficient indications have resulted from the investigation, particularly the questioning of witnesses and suspects as well as the analysis of seized data, that the accused [Mr Winterkorn] may have known about the manipulating software and its effects sooner than he has said publicly," the prosecutors said in a statement.
Earlier this month, VW admitted to US prosecutors that about 40 employees had deleted thousands of documents in an effort to hide systematic emissions cheating from regulators.
It was also fined $4.3bn by US authorities and agreed to plead guilty to criminal charges.
In addition, the carmaker has agreed to a $15bn civil settlement with environmental authorities and car owners in the US.
It is also facing 8.8bn euros ($9.41bn) in damage claims following the collapse of VW's share price after the scandal broke.
VW shares slumped by a third in the immediate aftermath of the scandal and are still 7% below their September 2015 level.