The U.S. arm of Fiat Chrysler Automobiles pleaded guilty Friday to conspiracy to defraud the United States, wire fraud, and violating the Clean Air Act for “making false and misleading representations” regarding emissions control systems on more than 100,000 vehicles.
The automobile manufacturer, which changed its name to FCA US in 2014, agreed to pay a criminal fine of approximately $96 million and to forfeit nearly $204 million, according to a Department of Justice (DOJ) press release. At issue were misstatements regarding emission of pollutants, fuel efficiency, and compliance with U.S. emissions standards on model year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel trucks.
Beginning in 2010, FCA US developed a new diesel engine for Jeep Grand Cherokee and Ram 1500 vehicles, which were marketed to U.S. customers as “clean EcoDiesel” vehicles with best-in-class fuel efficiency.
However, according to court documents, the company installed software features and engaged in other deceptive and fraudulent conduct intended to avoid regulatory scrutiny and fraudulently help meet required emissions standards.
FCA US then engaged in deceptive and fraudulent conduct to conceal the emissions impact and function of the emissions control systems from its U.S. regulators and U.S. customers by:
- Submitting false and misleading applications to U.S. regulators to receive authorization to sell the vehicles;
- Making false and misleading representations to U.S. regulators both in person and in response to written requests for information; and
- Making false and misleading representations to consumers in advertisements and window labels.
“FCA US engaged in a multiyear scheme to mislead U.S. regulators and customers,” said Assistant Attorney General Kenneth Polite Jr. of the DOJ’s Criminal Division. “Today’s guilty plea demonstrates the department’s dedication to prosecuting all types of corporate malfeasance and holding accountable companies that seek to place profits above candor, good corporate governance, and timely remediation.”
The plea deal comes five years after settlement of Volkswagen’s “Dieselgate” scandal, in which the automobile giant agreed to pay $4.3 billion in a guilty plea to the DOJ of its own. Fiat Chrysler paid a $9.5 million fine in 2020 regarding an internal audit claiming its diesel engines complied with all U.S. environmental laws and did not use “defeat devices” to circumvent or fool emission tests.
Compliance considerations: Under the terms of the guilty plea, which remains subject to court approval, FCA US agreed to cooperate with the DOJ in any ongoing or future criminal investigations.
The company also agreed to continue to implement a compliance and ethics program designed to prevent and detect fraudulent conduct throughout its operations and report to the DOJ regarding remediation, implementation, and testing of its compliance program and internal controls.
The DOJ determined the implementation of an independent compliance monitor at the company to be “unnecessary.”
FCA US response: FCA US, a wholly owned subsidiary of Stellantis, announced in a statement it agreed to the settlement with the DOJ, stressing that, “Consumer claims related to the subject vehicles have already been resolved, and no additional recalls are required.”
“As described in Stellantis N.V.’s 2021 financial disclosures, approximately €266 million ($301 million) was previously accrued related to this matter, which is sufficient to cover the forfeiture and penalty imposed by the plea agreement,” the statement read.