FCA US has been ordered to pay a $96.1 million fine and forfeiture of $203.6 million for lying about the “design, calibration, and function of the emissions control systems” on more than 100,000 of its model year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles. It further lied about these vehicles’ emission of pollutants, fuel efficiency, and compliance with U.S. emissions standards, according to a Justice Department press release.
The Aug. 1 federal court sentencing followed a three-year investigation and a guilty plea entered by the company in June. “This resolution shows that the Department of Justice is committed to holding corporate wrongdoers accountable for misleading regulators,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division.
According to admissions and court documents, beginning at least as early as 2010, FCA US designed a “false and misleading” marketing campaign that represented to U.S. consumers that its Jeep Grand Cherokee and Ram 1500 vehicles complied with U.S. emissions requirements, had “best-in-class fuel efficiency,” and were equipped with “clean EcoDiesel engine[s],” designed to reduce emissions.
In reality, according to court documents, FCA US had installed emissions-control software features designed to cheat federal test procedures, while also receiving a fuel efficiency rating that could be marketed to FCA US’s potential customers as “best-in-class.” Specifically, FCA US purposely calibrated the emissions control systems on these vehicles to produce fewer toxic emissions during the federal test procedures than when FCA US’s customers were driving the vehicles under normal driving conditions.
Consequently, FCA US “made false and misleading representations to regulators” to ensure it obtained regulatory approval to sell the vehicles in the United States, the Justice Department stated.
FCA US then engaged in deceptive and fraudulent conduct to conceal the emissions impact and function of the emissions control systems from U.S. regulators and customers by “submitting false and misleading applications to U.S. regulators to receive authorization to sell the vehicles” and “making false and misleading representations to U.S. regulators both in person and in response to written requests for information,” the Justice Department stated.
Settlement Terms
Under the terms of FCA’s guilty plea, which has now been approved by the court, FCA agreed to continue to cooperate with the Justice Department in any ongoing or future criminal investigations relating to this conduct. Additionally, FCA US 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, the Justice Department stated.
The Justice Department said it reached this agreement with FCA US based on several factors, including the nature and seriousness of the offense conduct; the company’s failure to voluntarily and timely disclose the conduct that triggered the investigation; and its failure to conduct sufficient, timely, or appropriate remedial action.
“FCA US received credit for cooperation with the Department’s investigation and has committed to further enhance its compliance program and internal controls,” the agency stated.
In related criminal prosecutions, three FCA employees—U.S. citizen Emanuele Palma, and two Italian nationals, Sergio Pasini and Gianluca Sabbioni—were indicted and await trial for their alleged role in the conspiracy and for violations of the Clean Air Act. The FBI and EPA’s Criminal Investigations Division are investigating the case. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.