Former execs at Fiat Chrysler, union, raided funds

A former Fiat Chrysler executive who negotiated labor deals and the wife of a union leader representing US auto workers were charged on Wednesday with enriching themselves with money meant for worker training.

A Detroit grand jury indicted Alphons Iacobelli, who was in charge of negotiating and administering collective bargaining agreements with the United Automobile Workers union.

Prosecutors alleged Iacobelli hid more than $1.2 million in illegal payments and gifts over a five-year period ending in 2014, taking funds from a separate entity set up to provide FCA workers with education and retraining. 

Monica Morgan, the wife of former UAW vice president General Holiefield, who was Iacobelli's counterpart at the union until he died in 2015, was also charged in connection with the alleged conspiracy. 

The indictment claims that Iacobelli made improper payments and gifts, including designer clothing, jewelry, and furniture, and paid off a $262,219 mortgage on Holiefield and Morgan's residence.   

The illegal payments were funneled through the UAW-Chrysler National Training Center in Detroit, from which Iacobelli also diverted more than $1 million for his own use, including purchasing a Ferrari and leasing a private jet, prosecutors said. 

"Today's indictment exposes a disturbing criminal collaboration that was ongoing for years between high ranking officials of FCA and the UAW," said David Gelios of the FBI's Detroit office. 

He questioned "the integrity of contracts negotiated during the course of this criminal conspiracy."

But FCA US, the American arm of the car giant, and UAW both insisted that the scheme was isolated to a few bad actors. 

The UAW last ratified a four-year contract with Fiat Chrysler in 2015, after the alleged scheme ended, winning pay raises and effectively eliminating a two-tier wage system by 2019.  

The alleged conspiracy started in 2009, the same year Fiat took control of bankrupt Chrysler.  

"FCA US and the UAW were the victims of malfeasance by certain of their respective employees," the company said in a statement, adding that it fired Iacobelli and another worker, Jerome Durden, when it learned of their actions in 2015, and has cooperated with investigators. 

Durden, a former FCA US financial analyst in the accounting department, was also charged. 

In an open letter to members, UAW president Dennis Williams said he was appalled by the alleged conduct.

"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," he said, insisting that the union's labor contracts with the company were not affected.