A US grand jury indicted a senior manager at Fiat Chrysler Automobiles on charges he lied to regulators about diesel emissions, alleging the deception continued even after a scandal over cheating on government environmental tests had engulfed rival Volkswagen, a media report said.
The indictment of the Fiat Chrysler manager, unsealed on Tuesday (25 September), said others “known and unknown” to the grand jury also criminally conspired to mislead regulators and customers about emissions in diesel vehicles, a scheme they described in emails seized upon by US Justice Department officials, according to a Reuters news agency report.
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The charges came the same day prosecutors in Germany indicted Volkswagen’s current and former CEOs and the company’s board chairman on charges they failed to inform investors of that company’s diesel emissions fraud after they learned of it in 2015. Also on Tuesday, Daimler agreed to pay EUR870m in fines connected to a separate investigation of diesel emissions cheating.
Citing the the indictment unsealed on Tuesday, Reuters said Emanuele Palma, a senior manager of diesel driveability and emissions at Fiat Chrysler, faces charges of conspiracy, fraud, violating federal environmental law and making false statements stemming from work on Fiat Chrysler’s emissions system in US vehicles with diesel engines.
Palma, a 40-year-old Italian citizen, was arrested by the FBI on Tuesday morning at his home in Michigan. In the afternoon, he appeared before a federal judge in Detroit in shackles, a hooded sweatshirt and sweatpants. Magistrate Judge Elizabeth Stafford released him on a US$10,000 unsecured bond and ordered him to surrender his passport.
According to the news agency, prosecutors argued Palma represented a “significant flight risk” and sought unsuccessfully to have him placed under GPS monitoring. Palma’s lawyer, Kenneth Mogill, argued his client had family in the Detroit area and was cooperating with prosecutors.
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By GlobalDataThe indictment, Reuters said, described what it refers to as a “scheme” to use sophisticated software tricks to deceive regulators about the emissions performance of diesel engines offered in Ram pickup trucks and Jeep SUVs.
In what appears to be a similar move to that achieved by VW, Palma led a team of engineers which developed diesel engines and calibrated them with software allowing the vehicles to pollute less when undergoing government testing and more when driven on roads, US officials said.
Even more intriguing: The report said that, after the disclosure of Volkswagen’s emissions fraud in September 2015, the indictment states the US Environmental Protection Agency asked Fiat Chrysler for more testing of its diesel vehicles. In November 2015, the EPA warned Fiat Chrysler it suspected some of its vehicles were using secret software to defeat emissions tests.
Reuters said the indictment charges that months later, in a June 2016 meeting, Palma “personally provided false and misleading representations” to regulators.
Before 2016, Palma worked for VM Motori, a diesel engine manufacturer 50% owned by Fiat Chrysler until 2013 when it purchased the remainder of the company.
Fiat Chrysler, which has previously denied purposefully attempting to evade emissions requirements, said in a statement cited by Reuters it would “continue to fully cooperate with the authorities, as we have throughout this issue” and declined to comment further.
Reuters suggested the developments in the US criminal probe signalled additional scrutiny of Fiat Chrysler’s environmental practices was likely, despite the automaker’s $800m January settlement of civil claims stemming from the alleged emissions violations.
Fiat Chrysler agreed to pay up to resolve claims from the Justice Department, state officials and customers alleging the company installed illegal software allowing more than 100,000 diesel-powered vehicles to dupe government emissions tests and then pollute beyond legal limits on the road.
The settlement did not resolve any potential criminal liability, the Justice Department said when unveiling the agreement.
Reuters noted Fiat Chrysler at the time said the settlement did not change the company’s “position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests”.
According to the new agency, the indictment unsealed on Tuesday said Palma and unnamed co-conspirators “purposefully calibrated the emissions control system” in FCA vehicles to produce lower emissions under federal test cycles and release higher amounts of nitrogen oxides during real world driving conditions. They concealed the those moves from US environmental regulators, the indictment alleged.
The alleged fraud allowed Palma and the unnamed co-conspirators to obtain a favorable fuel economy rating that made Fiat Chrysler vehicles more attractive to potential customers, the indictment added.
Prosecutors alleged the conduct resulted in deceptive claims to customers that the vehicles featured “clean EcoDiesel engines”, the indictment said., according to Reuters.
