Chrysler parent Stellantis, through its U.S. operating arm, admitted in federal court Friday that the company was involved in a years-long conspiracy to cheat U.S. emissions tests in order to sell certain Jeep Grand Cherokee SUVs and Ram 1500 pickups in the United States and market them as “clean EcoDiesel.”
The admission came in the form of a guilty plea to one count of conspiracy to defraud the United States, commit wire fraud and violate the Clean Air Act, through Christopher Pardi, general counsel for FCA US LLC. He declined comment after the hearing at U.S. District Court in Detroit. Judge Nancy Edmunds set sentencing for July 18 in the case.
The company, known then as Fiat Chrysler Automobiles, had previously denied intentionally cheating on U.S. emissions tests. The vehicles, according to officials, had been calibrated so that they polluted less during federal emissions testing than when they were being driven. The attempt to fool U.S. regulators is reminiscent of Volkswagen’s Dieselgate, which cost that automaker billions of dollars to resolve.
Stellantis, in a statement, said it had “agreed to a settlement that resolves a U.S. Department of Justice criminal investigation involving approximately 101,482 vehicles from model-years 2014 to 2016 equipped with second-generation EcoDiesel V-6 engines.”
The company will forfeit about $204 million “in gains derived from the conduct” and pay a fine of about $96 million. The company, which noted that “consumer claims related to the subject vehicles have already been resolved, and no additional recalls are required,” will also be on probation for three years. The Free Press highlighted the forfeiture amount, minus the fine, after that portion was listed in a court filing Thursday.
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The criminal probe is just one aspect of this case. The company also agreed in 2020 to pay $9.5 million to settle a U.S. Securities and Exchange Commission case in the matter, and a civil settlement involving the Justice Department and consumers cost the company almost $800 million.
The company will not have to pay restitution, but it is required to cooperate with the ongoing investigation. An assistant prosecutor noted that the company has already made $183 million in payments to victims and that determining individual restitution would be quite cumbersome.
Three company managers named in the court filings, Sergio Pasini, Gianluca Sabbioni and Emanuele Palma, are awaiting trial on similar charges.
Dawn Ison, U.S. Attorney for the Eastern District of Michigan, was one of several legal authorities to criticize the company for its conduct following the plea.
“We expect all corporations to deal with regulators and the public openly and honestly. Unfortunately, one of our district’s biggest corporations fell far short of that standard, resulting in today’s guilty plea,” Ison said in a news release.
Friday’s plea marked the second criminal case in less than two years in which Stellantis, as FCA, pleaded guilty. In August, the company was ordered to pay $30 million and submit to a compliance monitor for three years for its role in a years-long corruption scandal, where prosecutors said the company funneled more than $3.5 million in illegal payments to UAW officials. Prior to its guilty plea in that case, the company said it had been “a victim of illegal conduct by certain rogue individuals.”
Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Become a subscriber.