The FCA scandal could prove a new headache for CEO Marchionne' search for a merger partner.

A federal grand jury is issuing subpoenas as government investigators expand their investigation into potentially illegal Fiat Chrysler Automobiles sales reporting practices, according to published reports.

The news comes a day after the automaker acknowledged that it has misstated its sales figures for a number of years and that rather than having six straight years of sales records, its upward climb actually came to an end in September 2013.

But several sources who have spoken to caution that any probe of sales policies could eventually spread beyond Fiat Chrysler and look at broader industry practices that can misrepresent the numbers. Such practices, said a senior executive at one of the nation’s largest automotive retailers, can negatively impact investors, dealers and consumers alike.

Some of FCA’s U.S. dealers have begun receiving subpoenas asking for documents and, possibly, testimony before a grand jury looking into FCA’s sales practices, according to a report in trade publication Automotive News. The automaker has 2,650 dealerships in the U.S.

FCA claims its own probe found it under-reporting sales by nearly 19,000 since 2011.

The scandal was kicked off last January when two dealerships owned by the Napleton Automotive Group filed civil racketeering charges against FCA. At the time, the automaker countered that it was just the work of “two disgruntled dealers who have failed to perform their obligations under the dealer agreements they signed with FCA US.”

But earlier this month word leaked out that the Securities and Exchange Commission was taking the charges seriously and launching its own probe. The SEC has not publicly commented but misstating sales numbers could be seen as an attempt to improperly impact a company’s stock price.

Yesterday, FCA acknowledged it had used several sales recording practices that could distort its monthly reporting. Among other things, it would count as a sale a report by a dealer that a customer had agreed to buy one of its products. But it wouldn’t correct the numbers if that deal fell through, for example, because of a problem with financing.

(For more on the scandal, Click Here.)

As a result of a sweeping restatement of its sales dating back to 2011, FCA said the claim that it has had 75 months of consecutives year-over-year sales increases was incorrect, and that the upward surge actually ended in September 2013. However, the maker also claimed found that during the period its internal analysis covered, it actually under-reported total volume by 18,996 cars, trucks and crossovers.

The maker called out media reports which, it claimed “have mistakenly suggested that potential inaccuracies in the monthly data somehow impact the integrity of FCA’s reported revenues in its financial statements.”

When asked about the report of a grand jury probe, however, spokesperson Shawn Morgan declined comment.

(FCA investing $1.5 bil to switch to pickup production at suburban Detroit plant. Click Here for the story.)

Even though the probe was kicked off by two dealers, some of the retailers being conducted by the government appear to be reluctant to participate.

It is “unfair that dealers should be dragged into this by expending time and money to help the (Department of) Justice make out a case against FCA. FCA employee statements and records should be sufficient,” Len Bellavia, a lawyer with Bellavia Blatt & Crossett in Mineola, N.Y., in an email quoted by Automotive News.

Ironically, among that attorney’s clients are the two Napleton Automotive Group dealerships that set the scandal in motion in the first place.

One of the questions raised by the FCA investigation is whether government officials will look at broader industry practices, according to a ranking and well-respected executive in automotive retailing. He warned that if federal investigators really look deep, they may uncover similar practices by almost all manufacturers.

(Democratic nominee Clinton the latest to call for a reworking of NAFTA agreement. Click Here for the story.)

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