September 24, 2019 / 3:34 PM / 21 days ago

UPDATE 2-Fiat Chrysler senior manager charged in diesel emissions probe -court document

(Adds details from indictment, related story links)

By Mike Spector and David Shepardson

Sept 24 (Reuters) - A senior manager at Fiat Chrysler Automobiles NV was criminally charged in connection with a U.S. Justice Department probe into excess emissions in diesel-powered vehicles, according to an indictment unsealed Tuesday.

Emanuele Palma, a diesel drivability and emissions senior manager at Fiat Chrysler, faces charges of conspiracy, fraud, violating federal environmental law and making false statements stemming from work on Fiat Chrysler's emissions system in U.S. vehicles with diesel engines, according to the indictment, handed up by a grand jury Sept. 18 and sealed until now.

Palma was arrested by the FBI at his residence in Bloomfield Hills, Michigan, without incident this morning, and faces a 1 p.m. EDT (1800GMT) court hearing on Tuesday, a Justice Department spokesman said.

Lawyers for Palma could not immediately be identified from the legal documents. Prior to 2016, Palma worked for VM Motori SpA, a diesel engine manufacturer that was 50% owned by Fiat Chrysler until 2013, when it purchased the remainder of the company.

Fiat Chrysler said in a statement Tuesday morning it was "just learning about details of the matter. We will continue to cooperate fully with authorities."

The developments in the U.S. criminal probe signal additional scrutiny of Fiat Chrysler's environmental practices remains on the horizon, despite the automaker's January settlement of civil claims stemming from the alleged emissions violations.

Fiat Chrysler agreed to pay about $800 million to resolve civil claims from the Justice Department, state officials and customers alleging the company installed illegal software allowing more than 100,000 diesel-powered vehicles to dupe government emissions tests and then pollute beyond legal limits on the road.

The settlement did not resolve any potential criminal liability, the Justice Department said when unveiling the agreement.

Fiat Chrysler at the time said the settlement did not change the company's "position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests."

The renewed focus from U.S. prosecutors on Fiat Chrysler's alleged emissions violations follows cases against Volkswagen AG and a number of that automaker's current and former executives over use of illegal software to fool government diesel-emissions tests and mislead regulators and consumers.

Volkswagen and some of its executives pleaded guilty to criminal charges in the scandal, and the German automaker paid billions of dollars in penalties.

German prosecutors on Tuesday charged former Volkswagen CEO Martin Winterkorn and other company executives in the scandal. A Winterkorn lawyer said the former CEO rejected the claims. He was previously charged in the United States.

The indictment unsealed Tuesday says Palma and unnamed co-conspirators "purposefully calibrated the emissions control system" in Fiat Chrysler vehicles to produce lower emissions under federal test cycles and release higher amounts of nitrogen oxides during real world driving conditions. They concealed the those moves from U.S. environmental regulators, the indictment alleged.

The alleged fraud allowed Palma and the unnamed co-conspirators to obtain a favorable fuel economy rating that made Fiat Chrysler vehicles more attractive to potential customers, the indictment said. Prosecutors alleged the conduct resulted in deceptive claims to customers that the vehicles featured "clean EcoDiesel engines," the indictment said.

Reporting by Mike Spector and David Shepardson; Editing by Jan Harvey and Nick Zieminski

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