Photographer: Patrick T. Fallon/Bloomberg

Chrysler Executive, UAW Officer's Widow Indicted for Scheme

  • Former VP diverted funds to pay for Ferrari, Mont Blanc pens
  • Carmaker and union say they cooperated with DOJ investigation

A U.S. federal grand jury indicted a former Fiat Chrysler Automobiles NV executive and the widow of a United Auto Workers officer for tapping a union training fund to spend millions of dollars on a Ferrari, Mont Blanc pens and a mortgage.

Al Iacobelli, who led U.S. labor relations for the automaker until June 2015, allegedly took more than $1.2 million from the UAW-Chrysler National Training Center for payments to then-UAW Vice President General Holiefield and his wife, Monica Morgan. Holiefield died in 2015. Iacobelli, 57, also was charged with tax violations for allegedly diverting more than $1 million from the fund for his own benefit.

The indictment “exposes a disturbing criminal collaboration that was ongoing for years between high-ranking officials of FCA and the UAW,” David Gelios, the special agent in charge of the FBI’s Detroit division, said in a statement.

The charges add to a litany of legal troubles at Fiat Chrysler, which is being investigated for possible environmental, safety and securities-law violations. For the UAW, the indictment could be a setback to the organizing push it’s mounting at a Nissan Motor Co. factory in Mississippi. The union has tried and mostly failed for decades to form unions at Japanese, German and South Korean auto plants in the U.S.

‘Prohibited Payments’

Investigators said the “prohibited payments” in question occurred from 2009 to 2014, indicating they started soon after then-Fiat SpA took control of what was Chrysler LLC as part of the latter’s government-backed bankruptcy reorganization.

Fiat Chrysler and the UAW “were the victims of malfeasance” by their respective employees, the carmaker said in a statement. The company said it investigated the matter after first learning of it in June 2015, prompting Iacobelli’s departure.

“FCA US has cooperated fully with the U.S. Attorney’s office in its investigation of this matter,” the carmaker said. “The company intends to pursue all potential legal remedies against Mr. Iacobelli and any other culpable parties.”

UAW President Dennis Williams said in a statement that he was appalled by the allegations and that the actions outlined “constitute a betrayal of trust by a former vice president of our union.”

The UAW has hired outside counsel to conduct an internal investigation into the reported activities, he said. The union cooperated with the Justice Department and has taken several steps to ensure funds aren’t misused in the future, Williams said.

David DuMouchel, Iacobelli’s lawyer, declined to comment. Steve Fishman, Morgan’s attorney, didn’t immediately respond to phone and email messages seeking comment.

Luxury Purchases

Prosecutors said Iacobelli used money from the UAW to buy a more than $350,000 Ferrari, lease a private jet, build a pool at his home and buy two limited-edition Mont Blanc pens that cost more than $37,500 each.

He and others on behalf of the automaker were charged with making more than $1.2 million of prohibited payments to Morgan, 54, and her late husband, Holiefield, who had been the UAW vice president representing Chrysler workers. Payments from bank and credit-card accounts for the training center were used to buy the couple jewelry, designer clothing and furniture, plus pay off their $262,219 home mortgage.

Morgan was also charged with using the companies Monica Morgan Photography, Wilson’s Diversified Products, and a third company to conceal the payments.

A financial analyst at the automaker was also charged for concealing the payments in tax filings for the training center.

The case is U.S. v Iacobelli, 17-cr-20406, U.S. District Court, Eastern District of Michigan, Southern Division (Detroit).

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