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Car industry scandal likely to grow

Fiat Chrysler motor company is considering expanding its court action into the alleged misuse of $30 million of corporate funds.

A special investigation has found another link with several people named in the biggest Federal Court case ever brought about by a car company against senior staff.

The biggest scandal to hit the Australian automotive industry is about to get bigger.

News Corp Australia understands the Fiat Chrysler motor company is considering expanding its Federal Court action into the alleged misuse of $30 million of corporate funds to include allegations concerning other former executives not currently named in the action.

"As this is a matter before the courts we won't engage in further discussions and cannot comment at this stage," said Pat Dougherty, who was appointed president and CEO of Fiat Chrysler Automobiles Australia (FCA Australia) in December 2014.

A News Corp Australia investigation has learned that several people who benefited from lucrative contracts had worked together at another car company

The revelation comes as a News Corp Australia investigation has learned that several people who benefited from lucrative contracts had worked together at another car company -- and one person had been sacked overseas for misuse of corporate funds.

At least four of the executives named in the FCA court documents worked together at Mercedes-Benz Australia 10 years ago.

There is no suggestion any action is pending from their previous employment at Mercedes-Benz Australia, and the German car maker is not involved in the FCA court case.

Fiat Chrysler Automobiles — which distributes Jeep, Chrysler, Fiat and Alfa Romeo cars — has filed court documents that allege former chief executive Clyde Campbell misused more than $30 million of company funds during his term in office, from October 2010 to May 2013.

According to court documents, FCA Australia alleges Mr Campbell "breached his fiduciary duties" and also used corporate funds "directly or indirectly" to buy a yacht, a plane, and lavish overseas trips.

The statement of claim lodged to the Victorian Registry of the Federal Court of Australia also alleges Mr Campbell's successor, Veronica Johns — who joined the company in 1998 as a personal assistant to the finance director and in May 2013 became the first Australian woman to head a car company — helped pay for house renovations using corporate funds.

The 51-page statement of claim filed to the Federal Court also names former Mercedes-Benz executives -- Ernst Lieb, David Piva and Sam Tabart -- who worked with Mr Campbell at the German car-maker.

Mr Campbell was general manager of sales for Mercedes-Benz cars in Australia from 2004 to 2007.

Mercedes-Benz Australia spokesman David McCarthy told News Corp Australia: "I am not aware of any specific allegations or investigations at Mercedes-Benz Australia regarding those people (the former Mercedes-Benz employees)."

In the Federal Court documents FCA Australia alleges Mr Lieb and Mr Piva benefited from $2,495,000 in funding towards "marketing support" and the acquisition of two Melbourne dealerships -- at Brighton and Chadstone -- in which they have a joint financial interest.

At the opening of the Chadstone dealership in April 2013 -- the same month Mr Campbell left his role as the boss of FCA Australia -- Mr Campbell, Ms Johns, Mr Lieb and Mr Piva "enjoyed an evening of mingling and speeches", according to a press release issued at the time.

Mr Piva described the occasion as "an exciting time to be a part of the Fiat Chrysler team".

Prior to becoming involved with the FCA brand of dealerships, Mr Lieb was from 2003 to 2006 the CEO and President of DaimlerChrysler Australia-Pacific, which represented the Mercedes-Benz and Chrysler group of companies that were jointly owned at the time.

Mr Piva also previously worked for Mercedes-Benz. According to his LinkedIn profile, his last position with the company, from 2006 to 2008, was as dealer principal of the Mercedes-Benz of Melbourne showroom, owned and operated by the German car-maker.

In October 2011, Mr Lieb was sacked from his role as the boss of Mercedes-Benz USA after the company found he used corporate funds to pay for golf club fees, flight upgrades, and renovations to his New Jersey house, including adding a home theatre, a gym, a washer and dryer and a barbecue.

In November 2012 Mr Lieb appealed the decision and tried to sue for wrongful dismissal. But the court in Stuttgart, Germany, dismissed the case saying the claims against Mr Lieb were "so serious that any further employment [at Mercedes-Benz] would be unacceptable".

Mr Lieb, who was born in Germany, eventually returned to Australia and reconnected with his former colleague, this time as a car dealer and with Mr Campbell as a car company CEO.

When Mr Campbell left Mercedes-Benz Australia in December 2007 he initially tried to establish a dealership within the Mercedes-Benz retail network but the plan never eventuated.

Mr Campbell subsequently joined Motortrak, a dealer marketing services company, before he was appointed as the boss of FCA Australia in October 2010.

Mr Tabart worked with both Mr Campbell and Mr Lieb at Mercedes-Benz from 2005 to 2007 as marketing manager for the Smart car brand, a subsidiary of Mercedes-Benz.

Mr Tabart was later hired by Mr Campbell to join FCA Australia as marketing director from 2010 to 2013. Mr Tabart is credited with commissioning the "I Bought A Jeep" advertising campaign.

In April 2013, the same month Mr Campbell left FCA Australia, Mr Tabart also left the company, to work for a corporate internet services business that, according to its website, specialises in search engine optimization, data reporting, and social media advertising.

Prior to Mr Tabart leaving, however, FCA Australia says in May 2012 it entered into a three-year contract worth "approximately $6,600,000" with the company called Digital Dialogue, which FCA Australia alleges was part owned by Mr Tabart.

The statement of claim alleges Mr Campbell "authorised the Digital Dialogue Media Contract on behalf of (FCA Australia)".

The statement of claim, filed on behalf of FCA Australia by law firm Arnold Bloch Liebler, repeatedly says throughout the document "further particulars will be provided before trial", when referring to most of the allegations.  

The interlocutory hearing of the FCA Australia case was due last week but has been postponed until June 16.

Mr Campbell's lawyer Sam Bond, has told media the accusations of misusing funds are "not only completely denied but considered scandalous".

News Corp Australia could not reach Veronica Johns, Ernst Lieb, David Piva and Sam Tabart for comment at the time this article was written.