Automaker Official Agrees to Plead Guilty to Conspiring to Violate the Clean Air Act

WASHINGTON – Emanuele Palma, 43, of automaker group FCA US, pleaded guilty today to a felony as a result of conspiring to violate the Clean Air Act (CAA). As alleged in court documents, Palma and others conspired to withhold information from the United States Environmental Protection Agency (EPA) regarding the design, calibration and function of the emissions control systems on more than 100,000 Model Year 2014, 2015 and 2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles. The co-conspirators also misrepresented the vehicles’ emissions of pollutants, fuel efficiency and compliance with U.S. emissions standards.

According to court documents, Palma pleaded guilty to Count 1 of the Superseding Indictment – originally fined in 2019 – charging him with conspiring to violate the Clean Air Act. Sentencing is set for Oct. 17 in front of U.S. District Judge Nancy Edmunds, sitting in Detroit, Michigan.

“Senior auto officials at FCA US, including Mr. Palma, conspired to circumvent pollution standards and obtain EPA certifications for hundreds of thousands of SUVs and pickup trucks under false pretenses,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Today’s actions reflect the Justice Department’s continued and steadfast commitment to enforcing the Clean Air Act and holding individuals accountable for attempting to circumvent our Nation’s pollution standards.”

“Today’s guilty plea demonstrates EPA’s commitment to holding accountable those in management positions who intentionally withhold key information from regulators,” said Acting Assistant Administrator Larry Starfield of EPA’s Office of Enforcement and Compliance Assurance. “Mr. Palma’s guilty plea accompanies the earlier conviction of Fiat Chrysler for defrauding both the EPA and customers, as well as creating an unfair advantage over automakers who complied with the law.”

“Mr. Palma and those he worked with concealed material information from the EPA about how certain of Fiat Chrysler’s diesel engines operated. Our environmental laws depend on companies being honest and transparent with the EPA about the environmental impact of their products,” said U.S. Attorney Dawn N. Ison for the Eastern District of Michigan. “The conduct in this case falls well short of that standard, and today’s guilty plea provides a measure of accountability for this deceptive conduct.”

According to Palma’s admissions and court documents, beginning at least as early as 2010, FCA US developed a new 3.0-liter diesel engine for use in FCA US’s Jeep Grand Cherokee and Ram 1500 vehicles (the Subject Vehicles) that would be sold in the United States. As alleged in the Superseding Indictment related to this plea agreement, Palma and others developed and calibrated the 3.0-liter diesel engine. Their responsibilities included calibrating several software features in the vehicles’ emissions control systems to meet emissions standards for nitrogen oxides (NOx), a family of poisonous gases that are formed when diesel fuels are burned at high temperatures, while also achieving best-in-class fuel efficiency targets set by FCA US. 

The Superseding Indictment alleges that the emissions control systems on the Subject Vehicles was purposely calibrated to produce less NOx emissions on the federal test procedures, or driving “cycles,” than when the Subject Vehicles were being driven by FCA US’s customers in the real world. One method that was used to effectuate this goal was called “T Eng,” a software function that affects the rate of exhaust gas recirculation.

According to court documents, Palma and his co-conspirators agreed not to disclose the existence of the T Eng function to the EPA. Palma knew that T Eng was properly the subject of regulation by the EPA, and in agreeing to withhold this information, he acknowledged concealing material information from that regulatory body. As a result of this concealment, material information was omitted from FCA’s applications for Certificates of Conformity from the EPA, which authorize the company to sell vehicles pursuant to the Clean Air Act. 

This plea is related to the corporate plea and sentencing of FCA US, LLC, in August 2022, where FCA US LLC, was sentenced and ordered to pay a fine of over $96.1 million; to satisfy a forfeiture money judgment of over $203.5 million; and to serve a three-year term of organizational probation.

Assistant Chief Michael T. O’Neill of the Criminal Division’s Fraud Section, White Collar Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse for the Eastern District of Michigan, and Senior Litigation Counsel Todd W. Gleason of the Environment and Natural Resources Division’s Environmental Crimes Section are prosecuting the case. The FBI and EPA’s Criminal Investigation Division are investigating this case.