Chrysler Says Racketeering Lawsuit Filed by 'Disgruntled Dealers'

Chrysler says 'two disgruntled dealers who have failed to perform' filed racketeering lawsuit.

Chrysler Says Racketeering Lawsuit Filed by 'Disgruntled Dealers'

Posted in News

— Two Fiat Chrysler (FCA) dealerships have filed a racketeering lawsuit against Chrysler alleging certain dealers were offered money if they reported vehicles as sold even if they were still sitting on the lot.

The dealers, located in Illinois and Florida, are part of the Ed Napleton Automotive Group, one of the largest car dealer groups in the country.

The lawsuit alleges Chrysler paid dealers to report false sales on the last day of the month and back out of the sales the next day before the factory warranty could begin.

The dealers claim the process helped Chrysler to look better to the public concerning increased sales numbers each year.

The plaintiffs claim dealers could join an incentive program if the dealers sold enough cars. Once in the program, dealers were eligible for subsidies for each sold vehicle.

As for how much money a dealer could make for reporting false sales, the lawsuit alleges Ed Napleton was offered $20,000 for filing false sales reports for 40 new cars. The $20,000 was to be kept under the table by claiming the payment from Chrysler was credit for an advertising agreement.

The lawsuit alleges one Chrysler dealership was paid tens of thousands of dollars for falsely reporting 85 vehicle sales, then "non-conspiring" dealerships received no bonuses from the automaker.

Although Napleton said no to the deal, it was later discovered that a false sale of 16 new cars had already been made without Napleton's approval or knowledge.

The plaintiffs also accuse FCA of giving some dealers more popular models if those same dealers falsified sales numbers.

Chrysler Rejects Allegations

FCA, like other companies in the midst of a lawsuit, typically does not comment on pending litigation. However, Chrysler did respond to this lawsuit by saying it strongly rejects the allegations by its dealers.

Chrysler says it investigated the allegations of false sales before the lawsuit was filed and found the allegations baseless, something the automaker told the plaintiffs before they filed the suit. FCA says when it requested evidence of false sales, the plaintiffs refused to substantiate their claims.

Chrysler says the lawsuit is nothing more than the product of two "disgruntled dealers who have failed to perform their obligations under the dealer agreements they signed with FCA US."

According to FCA, the dealers have consistently failed to perform since at least 2012 and have used threats of lawsuits over the last several years. Chrysler says the lawsuit threats were an attempt to make the automaker give the dealers special treatment in the Chrysler network.

Fiat Chrysler also says the media failed in its responsibilities by being willing to be used in questionable litigation practices without a full understanding of the facts.

The Fiat Chrysler dealer racketeering lawsuit was filed in the U.S. District Court, Northern District of Illinois - Napleton's Arlington Heights Motors, Inc et al v. FCA US, LLC et al.

Meanwhile, Chrysler says it has created a tool to help dealers assist customers. Called "Recall Central," the new Internet portal will be used to consolidate recall information to reach a higher recall completion rate. The automaker also says it has doubled the number of employees assigned to the task of vehicle safety.