Fiat Chrysler Automobiles is facing a coordinated U.S. probe into the automaker's U.S. sales reporting practices, the company said Monday.
Investigators from the FBI and the Securities and Exchange Commission visited Fiat Chrysler Automobiles field staff in their homes and offices this month as part of the probe, Automotive News has learned.
Federal staff attorneys also visited the headquarters of FCA US in Auburn Hills, Mich., the same day, July 11, a source with direct knowledge said. The person added that FCA employees were advised not to speak with investigators without counsel present. Raids or visits also were conducted in Orlando, Dallas and California, the source said, and included current and former FCA employees.
FCA, in a statement Monday, said it will "cooperate fully" with the SEC investigation into its "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 company added.
FCA said it has received similar inquiries from the Department of Justice and will cooperate with that department.
The probe is in an early stage, according to two unnamed people cited by Bloomberg News, who asked not to be identified because the investigation is confidential and declined to specify what conduct is being investigated.
A spokeswoman for the SEC declined to comment, while a spokeswoman for the FBI field office in Detroit said the agency would have no comment at this time.
This year, a dealership group in Illinois accused FCA US of civil racketeering in a federal civil lawsuit that alleged FCA paid dealers to improperly inflate sales. The automaker called the allegations "baseless" and an attempt to "publicly smear" the automaker and sought dismissal of the suit.
However, in April, shortly after FCA formally responded to the suit from Napleton Automotive Group, the automaker began including a long disclaimer on its monthly U.S. sales reports. The disclaimer described FCA US's "method for determining monthly sales" and said, in part:
"FCA US reported vehicle sales represent sales of its vehicles to retail and fleet customers, as well as limited deliveries of vehicles to its officers, directors, employees and retirees. Sales from dealers to customers are reported to FCA US by dealers as sales are made on an ongoing basis through a new vehicle delivery reporting system that then compiles the reported data as of the end of each month.
"Sales through dealers do not necessarily correspond to reported revenues, which are based on the sale and delivery of vehicles to the dealers. In certain limited circumstances where sales are made directly by FCA US, such sales are reported through its management reporting system."
Similar legal disclaimers have appeared in FCA's subsequent monthly sales reports. A spokesman said at the time that the disclaimers were unrelated to the Napleton allegations and lawsuit.
The Napleton suit has brought renewed attention to the way automakers report sales results in the U.S.
-Larry P. Vellequette is a reporter for Automotive News.