FCA US LLC pleads guilty to fraudulent conspiracy | Takeover bid
FCA US LLC (FCA US), formerly Chrysler Group LLC, has pleaded guilty to one felony count and agreed to pay approximately $300 million in criminal penalties following the company’s plot to defraud regulators and US customers by making false and misleading statements. on the design, calibration and operation of emission control systems on more than 100,000 Jeep Grand Cherokee and Ram 1500 diesel vehicles of model years 2014, 2015 and 2016, and on pollutant emissions, fuel efficiency and compliance with US standards for these vehicles emissions standards.
FCA US pleaded guilty to a criminal information charging the company with one count of conspiracy to defraud the United States, commit wire fraud and violate the Clean Air Act. Pursuant to the plea agreement, FCA US agreed to pay a criminal penalty of $96,145,784 and waive $203,572,892.
“FCA US has engaged in a multi-year scheme to mislead US regulators and customers,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s guilty plea demonstrates the department’s commitment to prosecuting all types of corporate wrongdoing and to holding accountable companies that seek to put profits above candor, good governance corporate actions and corrective action in a timely manner.”
“We expect all companies to deal with regulators and the public openly and honestly,” said U.S. Attorney Dawn N. Ison for the Eastern District of Michigan. “Unfortunately, one of the largest corporations in our district failed to meet this standard, resulting in today’s guilty plea. My office is committed to holding accountable anyone who engages in fraud and to deceptions that violate federal law, whether it’s an individual or one of the largest automakers in the world.
“FCA attempts to circumvent pollution standards undermine laws in place to protect human health, the environment and consumers,” said Assistant Attorney General Todd Kim of the Environment and Natural Resources Division. of the Ministry of Justice. “Today’s actions reflect the Justice Department’s continued and unwavering commitment to upholding the Clean Air Act and holding individuals and businesses accountable for corporate wrongdoing.”
“The FCA’s involvement in this criminal scheme has fooled both its regulators and its consumers,” said Deputy Director Luis Quesada of the FBI’s Criminal Investigations Division. “These regulations have been put in place to protect the health and well-being of our citizens and the environment. This guilty plea reflects the commitment of the FBI and our local, state, and federal partners to investigate and bring to justice those who engage in fraudulent and harmful practices.
“Emissions testing is an important requirement of the Clean Air Act because it protects our nation’s air quality,” said Larry Starfield, acting deputy administrator of the Office of Enforcement and Assurance. Environmental Protection Agency (EPA) compliance. “Today’s guilty plea demonstrates the EPA’s commitment to holding companies like Fiat Chrysler accountable for violating environmental regulations that protect public health and the environment.”
According to the company’s admissions and court documents, since at least 2010, FCA US has been developing a new 3.0-liter diesel engine for use in FCA US’ Jeep Grand Cherokee and Ram 1500 vehicles (the subject vehicles) that would be sold in the United States. FCA US has designed a specific marketing campaign to market these vehicles to US customers as “Clean EcoDiesel” vehicles with best-in-class fuel efficiency. However, according to court documents, FCA US installed software features in the affected vehicles and engaged in other deceptive and fraudulent behavior intended to avoid regulatory scrutiny and fraudulently assist the affected vehicles in meeting safety standards. required emissions, while retaining features that would make them more attractive. to consumers, particularly with regard to energy efficiency, maintenance intervals and performance.
Specifically, FCA US deliberately calibrated the emission control systems on affected vehicles to produce fewer NOx emissions during federal test procedures, or driving “cycles,” than when the affected vehicles were driven by the FCA US customers under normal driving conditions. FCA US then engaged in deceptive and fraudulent conduct to conceal the impact on emissions and the function of emission control systems from its US regulators and US customers by (a) submitting false and misleading claims to U.S. regulators to receive clearance to sell the vehicles, (b) make false and misleading statements to U.S. regulators both in person and in response to written requests for information, and (c) make false statements and misleading to consumers about the affected vehicles in advertisements and window labels, including that the affected vehicles met U.S. emissions requirements, had best-in-class fuel efficiency, as measured by EPA tests, and were equipped with a “clean EcoDiesel engine”.[s]which reduced emissions.
For example, FCA US referred to the manner in which it manipulated an emissions control method as “cycle detection” and “cycle beat”. Without the use of this emissions control software by “beating the cycle”, subject vehicles were unable to pass the emissions portions of federal test procedures while receiving an efficiency rating fuel that could be marketed to potential FCA US customers as “best in class”, consistent with FCA US 3.0 liter diesel program objectives, schedule and marketing strategy. Since FCA US was aware that the decision to calibrate the emissions control system used on the vehicles at issue to operate differently “on cycle” versus “off cycle” would be subject to scrutiny by regulators United States, FCA US made false and misleading statements to regulators to ensure that it obtained regulatory approval to sell the subject vehicles in the United States.
Pursuant to the guilty plea, which remains subject to court approval, FCA US has agreed to continue to cooperate with the Department of Justice in any ongoing or future criminal investigations relating to this conduct. In addition, as part of the guilty plea, FCA US has also agreed to continue implementing a compliance and ethics program designed to prevent and detect fraudulent behavior throughout its operations and will report to the department concerning the correction, implementation and testing of its conformity. program and internal controls.
The government entered into this agreement with FCA US based on several factors, including, among others, the nature and seriousness of the offending conduct, the company’s failure to voluntarily and in a timely manner disclose the conduct that triggered the investigation, and its failure to conduct a sufficiently timely or appropriate corrective action investigation. FCA US has received praise for its cooperation with the department’s investigation and has improved, and is committed to improving, its compliance program and internal controls.
Judgment is scheduled for July 18.
In related criminal proceedings, three US FCA employees, Emanuele Palma, Sergio Pasini and Gianluca Sabbioni, have been charged with conspiracy to defraud the United States and violate the Clean Air Act and six counts of violation. of the Clean Air Act. They are awaiting trial. An indictment is only an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt by a court.
The FBI and the EPA’s Criminal Investigations Division are investigating the case.
trial attorneys Jason M. Covert, Kyle W. Maurer, Michael P. McCarthy, and Deputy Chief Michael T. O’Neill of the Criminal Division Fraud Section; White Collar Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse of the U.S. Attorney’s Office for the Eastern District of Michigan; and senior prosecutor Todd W. Gleason of the Environmental Crimes Section of the Division of Environment and Natural Resources is prosecuting the case.
The Fraud Section uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Victims who have questions can contact the Victim Assistance Unit in the Fraud Section by calling the Victim Assistance Hotline at 1-888-549-3945 or emailing victimassistance.fraud @usdoj.gov. To learn more about victims’ rights, please see: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas. If you believe you may be a victim of the conduct described in the plea agreement and criminal information, please visit https://www.justice.gov/criminal-vns/united-states-v-FCA.