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FCA under investigation for fraud by FBI, SEC, and DOJ

The US Justice Department is currently in the initial stages of investigating Fiat Chrysler Automobiles for fraud, according to two anonymous sources that spoke with Bloomberg. According to the unnamed sources, prosecutors are examining whether FCA violated US securities laws. As part of a coordinated investigation into FCA's sales reporting practices, investigators from the Federal Bureau of Investigation and the Securities and Exchange Commission visited the automaker's field staff in their offices and homes earlier this month, reports Automotive News. According to an anonymous source that spoke to Automotive News, federal staff attorneys visited FCA's US headquarters in Auburn Hills, MI on July 11. The unnamed source told the outlet that employees were advised to seek counsel before speaking with investigators. Investigators also visited the automaker's offices in Dallas, California, and Orlando, the unnamed source told Automotive News. The investigation comes after FCA claimed it had recorded the best month of sales in the US in the automaker's history in December with a total of 217,527 vehicles sold, reports Bloomberg. The claim now seems untrustworthy. According to a previous report from Automotive News, a Chicago-based dealership group filed a lawsuit against FCA earlier this year. The suit accused the automaker of paying dealers to fake new-vehicle sales. At the time, the automaker claimed the allegations were baseless and had no merit. After the lawsuit, FCA started to add an extended disclaimed at the end of its monthly sales reports, according to Automotive News. In a statement, FCA claimed that the automaker is cooperating with the SEC investigation and pointed out that it records "revenues based on shipments to dealers and customers, not on reported vehicle unit sales to end customers." We'll have more on the investigation as it unfolds. Related Video: News Source: Automotive News-sub.req., Automotive News-sub.req, Bloomberg, GIUSEPPE CACACE/AFP/Getty Images Government/Legal Chrysler Fiat FCA USDOJ investigation

Former Fiat Chrysler VP pleads guilty in UAW corruption probe

Former Fiat Chrysler Automobiles executive Alphons Iacobelli pleaded guilty on Monday in connection to allegations that he made at least $1.5 million in improper payments to senior union officials, the U.S. attorney's office in Detroit said. Iacobelli, 58, a former Fiat Chrysler vice president of employee relations, was charged in July in U.S. District Court in Detroit with taking part in a conspiracy to pay prohibited money and gifts to United Auto Workers union officials. Sentencing was set for May 29. Iacobelli faces a statutory maximum of eight years in prison, and prosecutors said he will be required to repay $835,000. A lawyer for Iacobelli did not immediately comment on Monday. Iacobelli pleaded guilty to conspiracy to violate the Labor Management Relations Act and to filing a false tax return based on his failure to report hundreds of thousands of dollars in income that he illegally diverted, the government said. Iacobelli reportedly made some lavish purchases with money taken from the UAW-Chrysler National Training Center — a 2013 Ferrari 458 Spider and two solid-gold Mont Blanc pens costing $37,500 apiece. He reportedly sold the sports car at a discount when news broke of the investigation. The government said Iacobelli conspired to make illegal payments in an effort to obtain concessions and advantages for Fiat Chrysler "in the negotiation, implementation and administration of the collective bargaining agreements between FCA and the UAW." Monica Morgan, the wife of former UAW Vice President General Holiefield, who died in March 2015, is also expected to plead guilty, Reuters reported last week, citing a person briefed on the matter. She faces a plea hearing on Feb. 6. Morgan was charged with conspiring with Iacobelli to violate federal labor law. Morgan's lawyer, Steve Fishman, declined comment. Jerome Durden, a former Fiat Chrysler official whom the government charged with conspiring to divert over $4.5 million in UAW training center funds, pleaded guilty in August. The Justice Department has a wide-ranging investigation under way. In November, General Motors and Ford confirmed they were cooperating with the investigation into alleged misspending at UAW union training centers funded by U.S. automakers. It was not clear if Iacobelli is cooperating in the ongoing investigation. General Motors is conducting an internal investigation into the matter. The UAW said in a statement Monday that it is "appalled at these charges.

Fiat eyes droptop SUV market with 500X convertible

Fiat will add a convertible version of the 500X crossover, Automotive News Europe has confirmed. The droptop variant will retain the side structure of the hardtop version, including the doors and door frames, and will utilize a roll-bar canvas top that incorporates the rear window, similar to the design of the 500 Cabrio. The open-air crossover is due to begin production this year. There's no word from FCA's U.S. arm on whether the model will come to the United States. Fiat's U.S. dealers might very well want it, given that they just lost the 124 Spider and the 500L hatchback for 2021. This despite the unenviable sales track record for crossover convertibles. Outside of hardcore off-roaders like the Jeep Wrangler (and, by all appearances, the new Ford Bronco), the notion of a convertible SUV has proven to be a sales flop. The odd-duck Nissan Murano Cross Cabriolet, which at least made more of an effort with its two-door body and full soft top, was nonetheless an embarrassing failure that expired with the second-generation Murano in 2014. Land Rover's first-generation Range Rover Evoque already had a two-door body style when it, too, took a stab at the idea with the Evoque Convertible for 2017. The Evoque was already something of a high-end fashion statement, so maybe the beautiful people who summer in the Hamptons or the south of France would want to bop around town in a baby SUV that allowed them to show off their fabulous selves. Turns out, no. The Evoque convertible pointedly was left on the shelf (along with the two-door hardtop) when the model was redesigned for 2020. Maybe things will be different for Fiat. In Europe, the 500X convertible will go up against the only other vehicle of its type, Volkswagen's T-Roc Cabriolet. At the launch of that VW in late 2019, Volkswagen's board member in charge of marketing asserted that the idea of combining a convertible and a crossover was "a great opportunity," and yet he also said, "From a rational side, you would never go into the cabriolet market.” For Fiat — as well as for Volkswagen — it's likely that one of those sentiments will prove correct.