Napleton retains all stores in FCA settlement

Ed Napleton, the dealer who sued Fiat Chrysler Automobiles in 2016, accusing it of paying dealers to inflate sales numbers, will keep all seven of his FCA dealerships.

Last week, FCA US settled the antitrust lawsuit, which claimed the company pushed dealers to submit fraudulent sales numbers to make the automaker's performance seem better than it was.

The lawsuit, filed in federal court in Chicago in January 2016, also accused FCA of racketeering, breach of contract and relying on false sales data to measure dealerships' performance.

FCA won dismissal of the racketeering claim, and the remaining case was expected to head to trial this year.

Napleton Automotive Group, a 48-rooftop dealership group with Ed Napleton as president, alleged in its complaint that FCA offered dealers large amounts of money to report unsold vehicles as sold on the last sales day of the month and then unwind those sales the next business day before factory warranties kicked in.

The sales inflation put Napleton's stores at risk of termination, according to a March 2016 amended complaint. The automaker threatened "to terminate Plaintiffs' dealership agreements based upon skewed data and inaccurate assessments of Plaintiffs' performance" against sales baselines set by the automaker, the complaint said.

But last week, Napleton told Automotive News that his FCA stores will remain open and are in good standing. He declined to comment on the settlement. FCA confirmed that Napleton will continue as an FCA dealer.

"FCA US is pleased we could reach an amicable resolution to this matter," the company said in a statement.

In July 2016, FCA restated five and a half years of U.S. sales and changed the way it reports to make the process more transparent.

At the time, FCA said its sales streak — previously touted as 75 months — actually ended in September 2013 after 41 months.

The change followed a report in Automotive News on an internal investigation in 2015 that found that the automaker reported 5,000 to 6,000 sales that had later been unwound, meaning they were not completed.

According to Napleton's lawsuit, an FCA business center director and a district manager offered him $20,000 to falsely report 40 new vehicles as sold. An employee of one of the Napleton dealerships had agreed to falsely report 16 sales earlier without Napleton's knowledge, the lawsuit said.

The lawsuit also claimed that stores that compete with Napleton's Chicago-area FCA store colluded with FCA and reported 85 new vehicles as sold in exchange for a large payment from the automaker.

When the complaint was filed in July 2016, FCA denied the allegations, calling them meritless. The automaker "intends to defend this action vigorously," the company said in a statement at the time.

Napleton's allegations prompted a federal investigation into whether FCA deceived shareholders with the figures it filed with the U.S. Securities and Exchange Commission. That investigation is ongoing.

Napleton Automotive Group, of Oakbrook Terrace, Ill., ranks No. 20 on Automotive News' list of the top 150 U.S.-based dealership groups, with 32,451 new vehicles retailed in 2018. Napleton has dealerships in Florida, Georgia Illinois, Indiana, Missouri, Pennsylvania and Wisconsin.

Vince Bond Jr., Larry P. Vellequette and Bloomberg contributed to this report.