A judge in Detroit on Tuesday rejected a portion of a criminal case against a Fiat Chrysler senior manager who was charged as part of the government’s investigation into cheating on diesel emissions tests by the automaker.
Emanuele Palma was charged in September 2019 for making misleading statements and also causing Fiat Chrysler to make misstatements to U.S. regulators regarding diesel engines’ emission control systems and wire fraud.
Of the 13 count indictment, U.S. District Court Judge Nancy Edmunds rejected four counts and a portion of one count – all associated with wire fraud, ruling the causal association between the alleged deceit and customers’ loss of money was “tenuous at best.”
Palma, an Italian citizen and auto engineer, is set to go trial in April next year.
U.S. officials embarked on a wide-ranging probe into diesel emissions cheating in the auto industry following Volkswagen‘s admission in September 2015 to using secret software to evade emissions rules.
Nine people have been charged in the Volkswagen investigation, while only Palma has been charged in the Fiat Chrysler case. Two people charged in the Volkswagen case got prison sentences after pleading guilty, while the other seven including former CEO Martin Winterkorn remain abroad and have been into U.S. courts.
Fiat Chrysler in January 2019 agreed to an $800 million settlement for resolving civil claims from the Justice Department, California Air Resources Board, and vehicle owners that it used illegal software that produced false results on diesel-emissions tests.
Last month, the Italian-American automaker recognized a new 222 million euro ($263 million) provision to settle matters mainly associated with the DOJ’s ongoing criminal investigation into diesel emissions.
Fiat Chrysler said at the time that settlement talks were continued and it was unclear if an agreement would be reached.
It separately agreed in September to pay $9.5 million to settle charges by the Securities and Exchange Commission over misleading investors over its compliance with emissions regulations.