A federal grand jury has charged top officials of Fiat Chrysler Automobiles’ North American division and the wife of a former top United Auto Workers official for corruption for diverting $1.2 million in funds from a worker training center to buy luxury items, including designer clothing and jewelry, as well as pay off a mortgage.
Alphons Iacobelli, Fiat Chrysler’s former vice president of employee relations, and Monica Morgan, wife of late UAW Vice President General Holiefield, were charged with criminal violations of the Labor Management Relations Act for a multi-year conspiracy to divert funds from the UAW-Chrysler National Training Center, an independent worker training facility in Detroit. Holiefield died in 2015. Jerome Durden, a financial analyst at Fiat Chrysler’s corporate accounting department, was charged with conspiracy to defraud for filing false tax returns to hide Holiefield and Iacobelli’s actions.
The diversions occurred between 2009-2014 when Iacobelli and Holiefield were the top officials at their respective organizations in charge of negotiating collective bargaining agreements. Iacobelli used $1 million in funds to purchase a Ferrari sportscar and charter a private jet, among other indulgences. Another $262,000 was diverted to pay off Morgan and Holiefield’s mortgage, according to the indictments.
The indictments were obtained through a joint investigation by the FBI, the IRS and the Labor Department’s Office of the Inspector General’s Office and the Office of Labor-Management Standards.
The Office of Labor-Management Standards “places a high priority on combatting financial malfeasance and safeguarding financial integrity in labor unions,” said agency director Ian Burg in a statement Friday. “This indictment leaves no question as to the agency’s commitment to seek justice when anyone puts personal financial gain ahead of the best interests of union members.”
The UAW said in a statement that others in the union were not aware of Holiefield’s actions. “The current UAW leadership had absolutely no knowledge of the alleged fraudulent activities detailed by this indictment until they were brought to our attention by the government. We nevertheless take responsibility for not doing more to exert our influence over the governance policies of the [training center], which might have uncovered this corruption sooner.” It has said it has “cooperated fully” with federal officials.
Fiat Chrysler Automobiles said that both it and the UAW “were the victims” in the matter. “These egregious acts were neither known to nor sanctioned by FCA US. Upon learning of possible malfeasance in June 2015, the company investigated the matter and, as a result, Mr. Iacobelli and Mr. Durden were promptly separated from the company upon FCA US obtaining credible evidence of wrongdoing. The company has also worked with the UAW to implement governance, auditing and structural reforms to improve the accountability and transparency of the [training center].”
