Fiat Chrysler senior manager charged in U.S. diesel emissions probe

A senior manager at Fiat Chrysler Automobiles was charged in connection with the U.S. Justice Department’s probe into excess emissions in diesel vehicles, according to documents unsealed Tuesday.

Emanuele Palma, a diesel drivability and emissions senior manager at Fiat Chrysler, was charged with conspiring to commit wire fraud, defraud the United States, violating the Clean Air Act and making false statements about the emissions system used on Fiat Chrysler’s U.S. diesel vehicles, according to a grand jury indictment dated Sept. 18.

Palma was arrested by the FBI at his residence in Bloomfield Hills, Michigan, without incident this morning, Justice Department spokesman Peter Carr said.

Palma has been arrested and is in custody, said Gina Balaya, a spokeswoman for the U.S. Attorney’s Office in Detroit, and faces a court hearing Tuesday afternoon.

Lawyers for Palma could not immediately be identified from the legal documents. Prior to 2016, Palma worked for VM Motori SpA, a diesel engine manufacturer that was 50% owned by Fiat Chrysler until 2013, when it purchased the remainder of the company.

Fiat Chrysler said in a statement it was “just learning about details of the matter. We will continue to cooperate fully with authorities.”

Fiat Chrysler agreed to pay about $800 million to resolve civil 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 developments in the criminal probe signal additional scrutiny of Fiat Chrysler’s environmental practices remains on the horizon, despite the automaker’s January settlement of civil claims stemming from the alleged emissions violations.

The indictment says Palma and unnamed co-conspirators “purposefully calibrated the emissions control system” to produce lower emissions under federal test cycles and higher emissions in real world emissions.

Fiat Chrysler at the time said the settlement, which did not resolve any potential criminal liability, did not change the company’s “position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests.”

The Justice Department has previously charged a number of current and former executives at Volkswagen AG in its excess diesel emissions scandal, including its former boss Martin Winterkorn. He, along with current VW CEO Herbert Diess and Chairman Hans Dieter Poetsch, were also charged Tuesday, by prosecutors in Germany.