Chrysler fined in odometer fraud case

ST. LOUIS -- Chrysler Corp. was fined $7.6 million in federal court Friday for selling about 30 previously wrecked vehicles to people who thought they were new.

The automaker was also charged with disconnecting odometers on about 60,000 new vehicles that were driven from one day to five weeks by Chrysler executives as part of the company's 'Overnight Evaluation Program.'


Chrysler further was charged with changing odometers on vehicles that had accidentally been left connected.

The sentence was imposed by U.S. District Judge John Nangle, who gave Chrsyler two weeks to pay the fine. Nangle also ordered the company to pay special assessments of $3,100.

In June 1987, a federal grand jury returned 16-count indictments against Chrysler and two executives for violating federal odometer tampering laws.

Chrysler was convicted on the 15 felony counts of mail fraud and one misdemeanor count of odometer fraud after pleading no contest to the entire indictment in December 1987.

The scheme, which occurred between 1949 and 1986, was discovered by the Missouri Highway Patrol in 1986. Troopers who stopped some cars as they were driven from the Chrysler plant in Fenton, a suburb of St. Louis, noticed that the odometers on the vehicles were disconnected. State officials notified federal investigators.


The U.S. Postal Inspection Service investigated and Chrysler was charged with mail fraud because the vehicle titles were sent to buyers through the mail.

Chrysler has replaced all vehicles identified as having been previously wrecked, except for vehicles involved in litigation, said L.S. Crawford, postal inspector in charge in St. Louis.

On Jan. 5, Nangle ordered Chrysler to complete the terms of the settlement of a class-action suit by paying $500 each to 37,000 people worldwide. The suit, which had been brought by the National Association of Attorneys General, was settled in December 1987.

The awards, which totaled more than $16 million, went to people who bought Chrysler cars with disconnected odometers that had been driven by company executives.

The consumers also are entitled to a second payment that depends on the amount their attorneys were awarded.

At the time of the settlement, Chrysler Chairman Lee A. Iococca said the policy of disconnecting odometers was 'one hell of a mistake' and that the practice had been discontinued.

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