FCA manager indicted in diesel emissions scandal

Chicago Tribune Finance 1 month ago

DETROIT A Fiat Chrysler Automobiles manager who prosecutors said led a team of engineers in developing diesel engines for the company has been indicted by a grand jury in FCA's diesel emissions cheating scandal.

Emanuele Palma, an FCA diesel calibration manager, faces a range of charges including conspiracy, clean air act violations, wire fraud and making false statements. The most serious charges carry sentences of up to 20 years in prison. Details of the case were unsealed Tuesday in federal court in Detroit.

Palma, 40, was escorted into his arraignment Tuesday before Magistrate Judge Elizabeth Stafford in handcuffs, and she entered a not guilty plea on his behalf, according to court staff. He is an Italian citizen and lives in Bloomfield Hills, a Justice Department news release said.

Palma was released on a $10,000 unsecured bond but had to surrender his Italian passport and turn in his enhanced driver's license (he'll have to get a standard license). Palma is also restricted to travel in Michigan unless he gets approval from pretrial services beforehand.

Palma's attorney, Kenneth Mogill of Lake Orion, noted in court that his client has been represented by counsel in the case over the last several years and has been "appropriately cooperative."

However, he pushed back against comparisons to the VW case, which cost the German auto company billions of dollars to settle, tarnished its reputation for years and led to numerous criminal charges.

"This is not the VW case. The facts, all the operative facts are different, and we intend to defend this very vigorously," Mogill said.

The FCA case involves 2014-16 Ram 1500 pickups and Jeep Grand Cherokees. Authorities had accused the company, in an echo of the emissions case against Volkswagen, of cheating on diesel emissions tests so the vehicles performed differently on the road than during testing.

More: Former Volkswagen manager Oliver Schmidt gets 7 years in diesel emissions cheating scandal

More: FCA has to pay some Jeep, Ram owners about $3,000

More: FCA announces pricing for 2020 Ram 1500 EcoDiesel

FCA earlier took part in a civil settlement that was to see the owners of the approximately 100,000 affected vehicles eligible for cash payments which could total more than $3,000 each. The company, which consistently denied that it engaged in any intentional wrongdoing, had expected to spend $790 million to resolve the cheating allegations.

In a statement earlier this year, however, U.S. Environmental Protection Agency Administrator Andrew Wheeler accused FCA directly, saying "not only did they violate the law, they also tried to hide their actions."

In the Justice Department release, authorities pledged to take strong action in such cases.

"Cheating government regulators, customers and the public for increased sales and compensation will be prosecuted by the Department of Justice to the fullest extent of the law," Assistant Attorney General Brian Benczkowski, of the Justice Department's Criminal Division, said. "The indictment unsealed today demonstrates that the Criminal Division is committed to investigating and prosecuting sophisticated criminal schemes and corporate crimes that violate the Clean Air Act and other federal laws."

Palma previously worked for FCA subsidiary VM Motori, a Cento, Italy-based diesel engine manufacturer, and now works for FCA as a diesel drivability and emissions senior manager, according to the federal court filing.

From at least December 2011 to April 2017, Palma and others "known and unknown to the grand jury" conspired to "mislead FCA's regulators, customers and the public" by making false and misleading representations about the design, calibration and function of emissions control systems on the trucks and SUVs and the emissions themselves, the filing said.

FCA issued a statement on the case, saying it is cooperating:

"We continue to fully cooperate with the authorities, as we have throughout this issue. We refer you to previous statements we have made on this matter and have nothing else to add at this time."

The previous statements included those by Mark Chernoby, FCA chief technical compliance officer, who noted that the case had caused uncertainty for customers and that its civil settlement sought to maintain their trust.

In addition to payments, the settlement called for a recall to update emissions control software and extended warranties. Chernoby said the company was also taking additional measures.

"We have implemented rigorous new validation procedures and updated our training programs to ensure continued compliance with the increasingly complex regulatory environment," Chernoby said in a statement at the time.

(c)2019 Detroit Free Press

Visit the Detroit Free Press at www.freep.com

Distributed by Tribune Content Agency, LLC.

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