UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

┐ UNITED STATES OF AMERICA, │ Plaintiff-Appellant, │ > No. 21-1782 │ v. │ │ EMANUELE PALMA, │ Defendant-Appellee. │ ┘

Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 2:19-cr-20626-1—Nancy G. Edmunds, District Judge.

Argued: October 20, 2022

Decided and Filed: January 18, 2023

Before: COLE, GIBBONS, and BUSH, Circuit Judges.

_________________

COUNSEL ARGUED: Andrew W. Laing, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Greg D. Andres, DAVIS, POLK & WARDWELL LLP, New York, New York, for Appellee. ON BRIEF: Andrew W. Laing, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., John K. Neal, UNITED STATES ATTORNEY’S OFFICE, Detroit, Michigan, for Appellant. Greg D. Andres, Paul J. Nathanson, DAVIS, POLK & WARDWELL LLP, New York, New York, Kenneth M. Mogill, MOGILL, POSNER & COHEN, Lake Orion, Michigan, for Appellee. _________________

OPINION _________________

JOHN K. BUSH, Circuit Judge. Defendant Emanuele Palma was indicted for several crimes, including conspiracy to commit wire fraud. The indictment alleges that Palma and others No. 21-1782 United States v. Palma Page 2

conspired to falsify test results for a new diesel engine and market these engines as environmentally friendly, meeting regulatory standards, and “best-in-class” compared with other diesel engines. The district court dismissed this count since, in its view, the property loss by consumers was too far removed from the falsified test results, which, the court reasoned, were meant to deceive regulators. Because Palma is only charged with conspiracy, not wire fraud itself, and because the indictment alleges adequate facts tying Palma to a fraudulent scheme, we REVERSE.

I

In 2010, Fiat Chrysler Automobiles N.V. (FCA) began developing a new diesel engine for several types of vehicles. Defendant Palma worked for FCA starting in 2013. Also named in the superseding indictment are Sergio Pasini, a head calibration engineer who supervised Palma, and Gianluca Sabbioni, a technical director who supervised Pasini.

Palma led a team of engineers who developed and calibrated diesel engines for use in FCA’s vehicles. Diesel-fueled engines use a combination of systems to reduce emissions and improve fuel economy and performance. But these systems are a double-edged sword. For one, the Exhaust Gas Recirculation system lowers emissions, but it reduces fuel economy. And Selective Catalytic Reduction, or the injection of ammonia fluid into the exhaust to reduce emissions, consumes diesel exhaust fluid, requiring owners to replenish the fluid more frequently.

The indictment alleges that Palma participated in a scheme that manipulated the diesel engine’s function during testing to produce artificially impressive results. Using the software programs known as “T_eng,” “Standard Dosing,” and “Online Dosing,” Palma and others allegedly ma