CARS.COM - A lawsuit by a suburban-Chicago car dealership alleging that Fiat Chrysler Automobiles paid off dealers to help the automaker inflate its monthly sales numbers has now ballooned into a federal investigation. The Associated Press is reporting that both the Securities and Exchange Commission and the Department of Justice are questioning FCA in response to the lawsuit, filed in January by the Illinois-based Napleton Automotive Group.
Related: FCA Rebukes Allegations It Paid Dealers to Inflate Sales Numbers
The suit alleges that FCA's Detroit-based North American operations knowingly endorsed and encouraged "the false reporting of motor vehicle sales by directly rewarding its local managers ... with monetary and quarterly bonuses, which are directly related to reported vehicle sales numbers," The Detroit News reported at the time the action was filed. The automaker at the time dismissed the allegations as baseless, calling it the product of "disgruntled" dealers who failed to meet obligations under their agreement with FCA.
FCA's statement on the federal probe said that the automaker records revenue in its quarterly and annual financial statements based on shipments to dealers and customers, and not on reported vehicle sales to end customers, but did not address monthly sales reports, according to the AP. The Napleton suit claimed that FCA offered to pay it $20,000 disguised as cooperative advertising support.
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