Federal Investigations Launched Into Fiat Chrysler's Sales Practices

Fiat Chrysler Automobiles is in hot water with federal authorities over the way it reports its sales.

Late yesterday, it was revealed that the U.S. Department of Justice and the Securities and Exchange Commission both launched investigations into the automaker, following months of accusations of inflated sales figures.

In a brief statement, FCA said it was “cooperating” with the SEC and Justice Department investigations “into the reporting of vehicle unit sales to end customers in the U.S.”

“In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers,” the automaker stated.

Prior to this, FCA faced several accusations of skewed sales numbers and a dealer lawsuit that alleged a program exists that rewards dealers who falsely report the highest monthly tallies.

According to Bloomberg, lawyers from the firm Hagens Berman Sobol Shapiro, which represents the dealer group behind the lawsuit, claimed FBI agents visited the homes of nine FCA employees on July 11. The employees were all managers who work at the automaker’s business centers and interact directly with dealers, the lawyers said.

A source told Automotive News that FBI and SEC investigators visited nine employees in their homes and offices on July 11. The same source said federal staff attorneys visited FCA’s U.S. headquarters in Auburn Hills, Michigan on the same day, and “raided or visited” locations in Orlando, Dallas and California.

Earlier this year, FCA called the racketeering lawsuit filed by Napleton Automotive Group a “smear job.” The scheme described by Napleton allegedly saw dealers file false new vehicle delivery reports in exchange for cash, with the money listed as advertising support. After the exchange, dealers would allegedly cancel the sale at the beginning of the next month.