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By Jaclyn Diaz
A former Fiat Chrysler executive and the widow of a UAW leader were indicted July 26 in what prosecutors say was “a multiyear conspiracy to pay and deliver prohibited money and things of value” to union employees and officers. The money, $1.2 million, was meant for a UAW training center, the U.S. Attorney’s Office in Detroit said.
Alphons Iacobelli, the former vice president of employee relations for Fiat Chrysler Automobiles, is accused of conspiring to violate the Labor-Management Relations Act. Monica Morgan is charged with conspiring with Iacobelli and others to violate the act ( U.S. v. Iacobelli, E.D. Mich., No. 17-cr-20406, indictment 7/26/17). Both are also facing tax fraud allegations.
Morgan was married to UAW Vice President General Holiefield, who died in March 2015. During the time these payments were made, Holiefield and Iacobelli were in charge of negotiating and administering the collective bargaining agreements between their respective employers, the government said.
The indictment alleges Iacobelli and others acting for FCA funneled more than $1.2 million in payments from 2009 to 2014 to Morgan, Holiefield, and others. Those payments included designer clothing, jewelry, and furniture. The $262,219 mortgage on Holiefield and Morgan’s residence in Harrison Township, Mich., was also paid off with the funds, prosecutors allege.
Those payments were made using the account and credit cards of the UAW-Chrysler National Training Center in Detroit, the indictment said.
“FCA US and the UAW were the victims” of wrongdoing committed by employees with roles at the training center, an FCA spokesman told Bloomberg BNA in a July 26 statement. “These egregious acts were neither known to nor sanctioned by FCA US. FCA US has cooperated fully with the U.S. Attorney’s Office in its investigation of this matter.”
Union leaders knew nothing of the allegations until the government brought it to their attention, UAW President Dennis Williams said in a statement July 26. “We nevertheless take responsibility for not doing more to exert our influence over the governance policies of the NTC, which might have uncovered this corruption sooner,” he said.
The training center is separate from the union and does not receive member dues, Williams said.
The UAW is cooperating with the government, Williams said. The union “hired independent outside counsel to conduct an internal investigation into these allegations,” he said.
Iacobelli helped himself to $1 million of the training center’s funds for personal use, according to the indictment. The government alleges he used the money to, among other things: buy a Ferrari 458 Spider worth more than $350,000; lease a private jet; buy two limited edition Mont Blanc pens costing $37,500 each; buy a pool and make hundreds of thousands of dollars in other improvements to his house; and pay off hundreds of thousands of dollars in personal credit card expenses.
Morgan was also charged with using various companies to conceal the payments she allegedly received from Iacobelli. She used Morgan Photography, Wilson’s Diversified Products, and a third company to hide the money, the indictment alleges. She is also charged with failing to report income on her tax returns.
Jerome Durden, a former financial analyst in the FCA corporate accounting department, was charged on June 13 in connection with this case.
Durden, who served as the controller of the training center from 2008 through 2015, is charged with conspiracy to defraud the U.S. by impairing, impeding, and obstructing the Internal Revenue Service. Durden filed tax returns on behalf of the center that concealed the millions in payments made to Holiefield, Iacobelli, and others, prosecutors allege.
FCA learned of possible wrongdoing in June 2015. After investigating the issue, both Iacobelli and Durden were removed once credible evidence was found, the automaker said.
FCA “intends to pursue all potential legal remedies against Mr. Iacobelli and any other culpable parties,” the spokesman said. As the U.S. Attorney’s investigation is ongoing, FCA can’t comment further, he said.
The UAW and FCA have since worked together to implement governance, auditing, and structural reforms to improve the transparency of the training center, the spokesman said.
To contact the reporter on this story: Jaclyn Diaz in Washington at jDiaz@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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