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Executives Plead Innocent

June 26, 1987

ST. LOUIS (AP) _ Two executives of Chrysler Motors Corp. pleaded innocent Friday to charges they conspired to commit fraud on vehicles that were driven by company managers, with the odometers disconnected, and then sold as new.

The charges were contained in a 16-count indictment returned Wednesday by a federal grand jury in St. Louis.

The indictment alleged that Chrysler, the nation’s third-largest automaker, allowed department heads to drive more than 60,000 vehicles with disconnected odometers from July 1985 to January 1987.

The indictment also charged that some of the cars were damaged during the drives, repaired, and then represented as new vehicles to dealers and the public.

Allen F. Scudder and Frank J. O’Reilly, who managed all Chrysler assembly plants during the period the indictment covers, appeared in U.S. District Court on Friday.

O’Reilly said afterward he was ″shocked and disappointed″ by the charges.

″I did nothing wrong and nothing I’m ashamed of,″ he said.

Chrysler, in responding to the charges, said it was practicing quality control and not consumer fraud. O’Reilly said the corporation’s test drive program was ″good for the consumer, good for the product, good for everyone.″

″I don’t see how it can be painted as something bad,″ he said.

O’Reilly also contested the charge that 40 cars were damaged during test drives, repaired and then sold as new.

″Cars that are wrecked are wrecked,″ he said. ″They just get scrapped.″

Scudder called the charges ″ridiculous.″

″I didn’t think I was doing anything wrong,″ he said.

If convicted, they could face large fines and one year in prison.

A trial date tentatively has been set for Aug. 31 before U.S. District Judge John F. Nangle.

Meanwhile, the owners of the 40 cars allegedly damaged during test drives are being asked to return their vehicles for inspection, a company spokesman said.

On Thursday, a day after the indictment, a Hazelwood, Mo., woman filed a class-action suit claiming that Chrysler committed odometer fraud. The suit was filed by Shirley Jones, who says her 1986 Plymouth Gran Fury is a lemon.

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