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Charging falsified sales, Napleton sues FCA

January 15, 2016
Two dealerships in the Napleton Automotive Group filed a civil racketeering suit against FCA, alleging the company offered dealers large amounts of money to report unsold vehicles as sold.
 
The federal suit, filed Jan. 12, alleges, among other claims, that FCA conspired with certain dealers to inflate the automaker’s monthly U.S. sales reports. The company has posted 69 consecutive monthly year-over-year gains after recovering from its U.S.-steered bankruptcy. 
The suit, filed by Kevin Hyde, an assistant general counsel for the dealerships, alleges that dealers were paid to report the false sales on the last day of the sales month and then "back out" or unwind the sales the following business day "before the factory warranty on the vehicles could be processed and start to run."
FCA officials, the suit alleges, were aware of the false reporting of sales and rewarded local managers for hitting sales targets — even though the company knew the sales goals had only been met via false sales reports.
 
FCA allegedly directly benefited from the practice "as it results in the inflation of the number of year-over-year sales which, in turn, create the appearance that FCA’s performance is better than, in reality, it actually is."
The suit charges that one of the automaker’s business center managers at one point offered Edward Napleton $20,000 "to falsely report the sales of 40 new vehicles" at the end of an unspecified month. The suit says the $20,000 payment from FCA was to be disguised "as a co-op advertising credit to the dealer’s account" so as not to trigger a sales audit and expose the practice.
 
 

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