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Enter Salesgate: Fiat Chrysler Accused of Falsely Declaring Sales

Fiat Chrysler Automobiles has been called to court on accusations of racketeering, made by two Fiat Chrysler dealerships.
Enter Salesgate: Fiat Chrysler Accused of Falsely Declaring Sales 1 photo
Photo: FCA
The plaintiffs are part of an auto group from Chicago, called Napleton Automotive Group, and have accused the Fiat Chrysler Automobiles Corporation of conspiring with select dealers to falsely inflate the monthly US sales reports of the automaker.

According to Automotive News, FCA has posted 69 consecutive monthly year-over-year sales gains after recovering from its bankruptcy with the help of the US Government. This would be the largest current US sales streak of any automaker, so we’re talking about a serious situation.

If the accusations turn out to be real, the Fiat Chrysler Automobiles group could have significant problems with both the US Government and its shareholders. The company is accused of stating higher sales figures each month to show better performance than what was actually achieved.

Mike Palese, one of FCA US’s spokespersons, says that the company “has not been served with this lawsuit and cannot comment until it has adequate opportunity to review what it alleges.

According to the plaintiffs, several dealers of FCA cars were paid by the central corporation to report false sales on the last day of each sales month and then “back out” these fictitious transactions the following business day.

The secret of the scheme was not to allow the factory warranty of the cars to be processed and start to run, therefore considering the presumably sold vehicles still new. By not starting the factory warranty, those cars could eventually be sold to customers as new.

Naturally, those vehicles actually were new, but their papers were allegedly involved in the sales scheme. However, the plan didn’t affect the future owners of those cars in any way.

One of the plaintiffs is Edward Napleton, the principal of a Chrysler, Jeep, Dodge, and Ram dealer. Mr. Napleton claims to have been offered $20,000 to “falsely report the sale of 40 new vehicles” at the end of a month that would later be specified. Upon this request, which Napleton refused, the dealer principal discovered that one of his employees agreed to falsely report the sale of 16 new vehicles without his knowledge.

Mr. Napleton stated that the payment would be disguised as “a co-op advertising credit to the dealer’s account,” so that the scheme would not trigger an audit for the company.

According to him, a competing FCA dealer in his area reported 85 false new vehicle delivery reports, for which it received “tens of thousands of dollars as an illicit reward.
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About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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