Justice Department pursues FCA in emission fraud, financial penalties being negotiated

According to sources familiar with the matter hand, Fiat Chrysler Automobiles (FCA) is close to an agreement to plead guilty to criminal conduct so as to resolve a multiyear emissions fraud probe revolving around its Ram pickup trucks and Jeep sport-utility vehicles (SUV) with diesel engines.

The deal, being brokered by FCA lawyers and the U.S. Justice Department is likely to be unveiled in coming weeks and include financial penalties in the range of $250 million to $300 million, said sources.

The development comes more than four years after Volkswagen AG’s diesel emission scandal involving almost 600,000 vehicles.

The deal would mark the final significant chapter in the government crackdown on automakers’ emissions practices that was precipitated by Volkswagen’s scandal.

The investigation by the FCA focuses on around 100,000 diesel-powered vehicles that allegedly evaded emissions norms. Since the terms of the settlements are still ongoing, the size of potential financial penalties could change with ongoing discussions.

A plea agreement would cap a series of investigations dating back to 2015 surrounding diesel-powered vehicles in FCA’s U.S. lineup. The current criminal investigation targets the U.S unit of the Italian-American automaker.

The affected vehicles span model years 2014 to 2016.

Earlier, automakers from Europe had promoted the so-called “clean diesel” technology as a way to reduce carbon dioxide emissions and ease a transition to an all-electric future. However, with regulators on both sides of the Atlantic uncovering evidence that diesel vehicles in fact polluted far more in real world driving scenarios, the argument for a slower transition to battery electric vehicles was shredded.

Currently, automakers are accelerating battery electric vehicle development to comply with tougher pollution standards.

As the negotiations between the lawyers heat up, an employee of the FCA is preparing to face charges next year on that he misled regulators on pollution from vehicles and continued the deception even after Volkswagen’s Dieselgate scandal.

This is not the only legal trouble for which the automaker is in the spotlight. Earlier this year in March, FCA pleaded guilty to violating U.S. labor law, admitting it conspired to make illegal payments to union officials.

According to sources familiar with the matter at hand, the criminal case against FCA is expected to track closely with the one against Volkswagen that the Justice Department unveiled in 2017.

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