Fiat Chrysler reportedly facing US criminal probe in emission scandal

A few days after being accused by the Environmental Protection Agency of cheating on its emissions tests, Fiat Chrysler is now being investigated by the Justice Department for failing to disclose secret software that allegedly facilitated the fraud, according to Bloomberg.

Earlier this week, an EPA administrator said FCA’s software appeared to be in violation of the Clean Air Act and was likely contributing to “illegal pollution.” The EPA stopped short of calling the software “defeat devices,” but has sent a request to Fiat Chrysler asking them to prove otherwise. The vehicles in question include Jeep Grand Cherokees from 2014 to 2016, and Dodge Ram 1500 Trucks.

In a statement, a spokesperson for FCA said the company “intends to work with the incoming administration to present its case and resolve this matter fairly and equitably.” It said it was “disappointed” by the EPA notice of violation and is looking forward to demonstrating that FCA’s emissions control strategies are “properly justified and thus are not ‘defeat devices’ under applicable regulations and to resolve this matter expeditiously.”

The scandal now hovering over FCA seems to share a lot of similarities with Volkswagen’s so-called Dieselgate, which also flared up this week when a VW executive was arrested by the FBI on charges of conspiring to defraud US customers. VW is said to have reached a $4.3 billion settlement with regulators.

According to Bloomberg, Fiat Chrysler used technology from German auto supplier Bosch, which is also under investigation for its role in providing software to VW. The FCA probe is likely to involve less vehicles than the VW investigation, but considering FCA’s precarious debt situation, could still hobble the automaker. FCA’s shares fell as much as 4.5 percent and were down 3 percent to $9.65 in New York trading.

In a call with reporters yesterday, FCA CEO Sergio Marchionne called the allegations “absolute nonsense.” He admitted his company’s software may be “technically deficient,” but denied accusations that it was similar to VW’s cheat devices.