FCA US, Formerly Chrysler Group, to Pay $300 Million for Emissions Scheme

FCA US LLC (FCA US), formerly Chrysler Group LLC, was sentenced in federal court in Detroit and ordered to pay a fine of $96,145,784; and a forfeiture money judgment of $203,572,892. The court also imposed a three-year term of organizational probation.

The conviction results from the company’s conspiracy to defraud U.S. regulators and customers by making false and misleading representations about the design, calibration, and function of the emissions control systems on more than 100,000 Model Year 2014, 2015, and 2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles, and about these vehicles’ emission of pollutants, fuel efficiency, and compliance with U.S. emissions standards.

According to the company’s admissions and court documents, beginning 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) that would be sold in the United States. FCA US designed a specific marketing campaign to market these vehicles to U.S. customers as “clean EcoDiesel” vehicles with best-in-class fuel efficiency. However, according to court documents, FCA US installed software features in the Subject Vehicles and engaged in other deceptive and fraudulent conduct intended to avoid regulatory scrutiny and to fraudulently help the Subject Vehicles meet the required emissions standards, while maintaining features that would make them more attractive to consumers, including with respect to fuel efficiency, service intervals, and performance.

Specifically, FCA US purposely calibrated the emissions control systems on the Subject Vehicles to produce less NOx emissions during the federal test procedures, or driving “cycles,” than when the Subject Vehicles were being driven by FCA US’s customers under normal driving conditions. 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 (a) submitting false and misleading applications to U.S. regulators to receive authorization to sell the vehicles, (b) making false and misleading representations to U.S. regulators both in person and in response to written requests for information, and (c) making false and misleading representations to consumers about the Subject Vehicles in advertisements and in window labels, including that the Subject Vehicles complied with U.S. emissions requirements, had best-in-class fuel efficiency as measured by EPA testing, and were equipped with “clean EcoDiesel engine[s]” that reduced emissions.

For example, FCA US referred to the manner in which it manipulated one method of emissions control as “cycle detection” and “cycle beating.” Without the “cycle beating” use of this emissions control software, the Subject Vehicles were unable to pass the emissions portions of the federal test procedures while also receiving a fuel efficiency rating that could be marketed to FCA US’s potential customers as “best-in-class,” consistent with FCA US’s 3.0-liter diesel program’s goals, timing, and marketing strategy. Because FCA US knew that the decision to calibrate the emissions control system used on the Subject Vehicles to perform differently “on cycle” versus “off cycle” would be subjected to significant scrutiny by U.S. regulators, FCA US made false and misleading representations to regulators to ensure that it obtained regulatory approval to sell the Subject Vehicles in the United States.

Under the terms of FCA’s guilty plea, 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 relating to this conduct. In addition, FCA US has also agreed to continue to implement a compliance and ethics program designed to prevent and detect fraudulent conduct throughout its operations and will report to the department regarding remediation, implementation, and testing of its compliance program and internal controls.

Source: U.S. Department of Justice

Topics USA