Fiat Chrysler, UAW Officials Sentenced in Embezzlement Scheme (1)

A former Fiat Chrysler Automobiles financial analyst was sentenced to a year and three months in prison, and two other UAW and FCA officials were sentenced to a year plus one day for their involvement in a scheme to embezzle funds from a union training center.

The three sentences are the latest development in a Justice Department probe scrutinizing automobile company funding of union training facilities. The investigation expanded last year to include GM and Ford. So far, charges have only been brought against officials involved with the FCA training center.

The U.S. Attorney’s Office called the sentences “further strides forward” in a larger effort to expose corruption in the UAW.

“We want the hard working men and women of the union to know that federal law enforcement will uncover, prosecute, and punish any effort to undermine their collective bargaining process,” United States Attorney Matthew Schneider said in a press release Nov. 7.

Sentencing Results

Former UAW Assistant Director Keith Mickens was sentenced to 12 months plus one day for conspiracy to violate the Labor Management Relations Act. He’ll also have to pay a $10,000 fine.

That’s less than what prosecutors recommended. They had asked for a 16-month prison sentence, arguing the former union official “enjoyed lavish and obscene entertainment” in his position and clearly abused trust through his involvement in the conspiracy. He faced a maximum sentence of 27 months in prison.

Any personal gain from the scheme was minimal, Mickens argued. He used training center funds for personal use “out of intense pressure by his superiors, not malice or greed,” according to the defendant’s sentence memorandum. He requested that the court depart from guidelines and sentence him to a non-custodial sentence such as house arrest.

Former FCA financial analyst Jerome Durden got 15 months for one count of conspiracy to defraud the U.S. and one count of failure to file a tax return. He’ll also have to pay $8,811 in restitution to the IRS. The maximum prison sentence for the two counts was 37 months and prosecutors requested a 15-month sentence with possible reduction for continued cooperation.

Former FCA Director of Employee Relations Michael Brown got 12 months plus one day for misprision of a felony, knowingly allowing a crime to continue without reporting it to authorities. That’s in line with prosecutors’ request for one year in prison with possible reduction for cooperation. Brown requested parole. He also will have to pay a $10,000 fine.

All three defendants were sentenced by U.S. District Judge Paul D. Borman and have six months to report for their sentencing.

Attorneys for the three defendants couldn’t immediately be reached for comment.

‘A Culture of Corruption’

Court filings depict widespread corruption in the upper echelons of the UAW and FCA where payments were accepted from the automaker to allegedly buy peace from the union.

“Leaders of the UAW viewed the National Training Center as a mechanism to take apparently unlimited and illegal payments from Fiat Chrysler for their own personal benefit, for the benefit of the union itself, and for their own lavish entertainment,” government prosecutors said in their sentencing memorandum for Mickens.

Mickens feared retribution for failing to follow orders from his boss, UAW Vice President General Holiefield, who died before the government’s investigation came to light. Failing to follow Holiefield’s orders would have meant being shunned from UAW leadership and a return to the factory floor, according to Mickens’ court filings.

Funds taken from the union training center were used by FCA executive Alphons Iacobelli to buy two $38,000 Mont Blanc fountain pens and a Ferrari, as well as help fund a mansion. Holiefield used his share of the cash to pay off his mortgage and fund travel around the world, according to prosecutors.

More Indictments Coming?

The government’s probe into corruption at the UAW appears far from over. Prosecutors suggested in court filings that additional indictments may be coming.

Durden and Brown’s cooperation with prosecutors is “unfinished” and will be necessary as the case expands to “other individuals and entities under investigation,” prosecutors said in court filings.

An Oct. 26 motion by the National Training Center at the core of the government’s investigation also remains pending. It’s attempting to gain crime victim status and become eligible for restitution of the embezzled funds. Government prosecutors are against granting the center such status, according to court filings.

In one government sentencing memorandum, the training center is named as a co-conspirator, not a victim.