FCA US LLC (FCA US), formerly Chrysler Group LLC, was ordered today by federal court in Detroit to pay a fine of $96,145,784; and a confiscation order of $203,572,892. The court also imposed an organizational probation period of three years.
The conviction stems from the company’s conspiracy to defraud U.S. regulators and customers by making false and misleading statements about the design, calibration and function of the emissions control systems on more than 100,000 Jeep Grand Cherokee and Ram 1500 model year. 2014, 2015, and 2016 diesel vehicles, and on pollutant emissions, fuel efficiency, and compliance with US emissions standards.
“This case demonstrates the Criminal Division’s commitment to prosecuting companies that want to put profits above full candor, corporate governance and timely remediation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Criminal Division of the Department of Justice. “Today’s sentence shows that companies engaged in misleading U.S. regulators, or their own customers, will be held accountable.”
“Today’s conviction is an appropriate punishment for a company that has plans to defraud regulators and consumers,” said US attorney Dawn N. Ison. “All companies must be transparent and honest in their dealings with the federal government and the public. This prosecution reflects how seriously my office takes this principle.”
“The FCA US conviction today, which includes a $300 million criminal fine, is the culmination of a three-year in-depth investigation,” said Assistant Attorney General Todd Kim of the Department of Justice’s Department of Environment and Natural Resources. This resolution demonstrates the Justice Department’s commitment to holding corporate violators accountable for misleading regulators. My sincere thanks go to our investigative partners at EPA-CID and the FBI.”
“Today’s sentencing clearly demonstrates that the EPA and our federal partners will hold large corporations like FCA accountable for meeting vehicle emissions standards,” said acting Assistant Administrator Larry Starfield of the Environmental’s Office of Enforcement and Compliance Assurance. Protection Agency. “Stopping environmental law violations and defrauding consumers is paramount to protecting clean air and human health.”
According to the company’s admissions and court documents, which began at least as early as 2010, FCA US developed a new 3.0-liter diesel engine for use in FCA US’s Jeep Grand Cherokee and Ram 1500 vehicles (the Subject Vehicles) used in the United States. FCA US 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 Subject’s Vehicles and engaged in other deceptive and fraudulent conduct intended to avoid regulatory oversight and to fraudulently assist the Subject’s Vehicles to comply with required emission standards, while keeping features that would make them better. attractive to consumers, including in terms of fuel efficiency, service intervals and performance.
Specifically, FCA US purposely calibrated the Affected Vehicles’ emission control systems to produce fewer NOx emissions during federal testing procedures, or “driving cycles,” than when the Affected Vehicles were driven by FCA US customers under normal driving conditions. FCA US then engaged in deceptive and fraudulent conduct to hide the emissions impact and function of its emissions control systems from its US regulators and US customers by (a) submitting false and misleading applications to US regulatory authorities to obtain permission to use the vehicles sell, (b) make false and misleading statements to U.S. regulatory authorities, both in person and in response to written requests for information, and (c) make false and misleading statements to consumers about the Vehicles of the Data Subject in advertisements and in window labels, including that the Subject’s Vehicles met U.S. emissions regulations, had best-in-class fuel efficiency as measured by EPA testing, and were equipped with “clean EcoDiesel engines.”[s]which reduced emissions.
For example, FCA US referred to the way it manipulated one method of emissions control as ‘cycle detection’ and ‘cycle knocking’. Without the “cycle beat” use of this emissions control software, the affected vehicles were unable to pass the emissions portions of federal testing procedures, while also receiving a fuel efficiency rating that could be sold to potential FCA US customers as “best-in-class.” in line with the objectives, timing and marketing strategy of FCA US’s 3.0-litre diesel program. Knowing that the decision to calibrate the emission control system used on the affected vehicles to perform differently “on cycle” than “off cycle” FCA US would be subject to scrutiny by US regulators, FCA US has made false and misleading statements to regulatory bodies to ensure it has received regulatory approval to sell the subject’s vehicles in the United States.
Under the terms of FCA’s plea of guilty, which has been approved by the court, FCA has agreed to continue to cooperate with the Department of Justice in any ongoing or future criminal investigations related to this conduct. In addition, FCA US has agreed to continue to implement a compliance and ethics program designed to prevent and detect fraudulent behavior in its operations, and will report to the department on remediation, implementation and testing of its compliance program and internal controls.
The government reached this agreement with FCA US based on several factors, including the nature and seriousness of the violation, the Company’s failure to voluntarily and in a timely manner disclose the conduct giving rise to the investigation, and the failure to adequate, timely, or appropriate corrective action. FCA US has been honored to cooperate with the department’s investigation and has enhanced its compliance program and internal controls and is committed to further improvement.
In the related criminal prosecution, three FCA employees, Emanuele Palma, Sergio Pasini and Gianluca Sabbioni, were charged with conspiracy to defraud the United States and violate the Clean Air Act and six charges of violation of the Clean Air Act. They are waiting for trial. An indictment is only an allegation and all suspects are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and EPA’s Criminal Investigations Division are investigating the case.
trial attorney Michael P. McCarthy and assistant chief Michael T. O’Neill of the Criminal Division’s Fraud Division; White Collar Unit Chief John K. Neal and Assistant US Attorney Timothy J. Wyse of the US Attorney’s Office for the Eastern District of Michigan; and senior trial attorney Todd W. Gleason of the Environmental Crime Division of the Environment and Natural Resources Division 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 with questions may contact the Victim Support Division of the Fraud Department by calling the Victim Support Telephone Line at 1-888-549-3945 or by emailing [email protected] For more information on victims’ rights, visit: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas. If you believe you have been the victim of the conduct described in the Plea Agreement and Criminal Information, please visit https://www.justice.gov/criminal-vns/case/united-states-v-fca.