Former FCA analyst pleads guilty in UAW probe
Ann Arbor — A former financial analyst with Fiat Chrysler Automobiles NV who is charged with helping to improperly channel more than $4.5 million in blue-collar training funds to union officials pleaded guilty in U.S. District Court on Tuesday.
Jerome Durden, 61, of Rochester Hills, faced charges of conspiracy to defraud the U.S. and failure to file a tax return — all linked to an investigation into improper financial activities at the UAW-Chrysler National Training Center. Durden was the center’s controller and pleaded guilty to both charges. He allegedly used some of the training funds for $4,300 in new carpeting at his home.
“He’s doing the right thing,” said Judith Gracey, Durden’s attorney, following the hearing in Ann Arbor. Durden declined to comment.
Durden now faces up to 37 months in prison as part of a plea agreement reached with the U.S. Attorney’s Office. He had faced as much as five years in prison on the conspiracy charge. His sentencing is scheduled for Dec. 12 in Ann Arbor.
Durden is expected to cooperate with prosecutors and could prove to be a damaging witness against members of the alleged conspiracy, said Peter Henning, a Wayne State University law professor and former federal prosecutor who has followed the case.
“They’ve gotten the witness to help follow the money,” Henning said. “It strengthens your case and could help the U.S. Attorney’s Office move up the food chain and get into the inner circle.”
He is one of three charged in the case which came to light in an unsealed indictment released in late July. Former top Fiat Chrysler labor negotiator, 57-year-old Alphons Iacobelli, also faces charges as does Monica Morgan-Holiefield, 54, of Harrison Township. She is the widow of former UAW Vice President General Holiefield.
Durden is alleged to have helped transfer millions of dollars in training center funds to Holiefield, Morgan-Holiefield and Iacobelli who used the funds on personal luxuries.
Durden and co-conspirators used the training center “as a conduit” to hide prohibited payments and valuables paid directly and indirectly to Holiefield and other UAW officials “by persons acting in the interest of Fiat Chrysler Automobiles US LLC,” according to court documents.
As part of the scheme from 2009 to 2015, Durden “agreed and conspired” with Iacobelli, Holiefield, Morgan-Holiefield, a senior UAW official called UAW-2, the training center and the Leave the Light on Foundation, other individuals and entities to defraud the U.S., according to court filings.
Durden was controller of the training center between 2008 and 2015 and was secretary of the center’s Joint Activities Board. He was employed by Fiat Chrysler as a member of the company’s corporate accounting department. Fiat Chrysler said that after it learned about the allegations in June 2015, it fired Durden.
Durden admitted to “preparing and filing numerous false tax returns” on behalf of the nonprofit training center and the Leave the Light on Foundation and acknowledged the false tax returns caused more than $1 million in tax losses to the U.S., prosecutors say.
“Mr. Durden’s criminal conduct was part of a broader pattern of dishonesty and collusion among those implicated in this investigation,” David P. Gelios, special agent in charge of the Detroit Division of the FBI, said in a statement. “Top level executives at FCA and the UAW chose to misappropriate over a million dollars directly from the NTC at the expense of the FCA workforce. The FBI and its federal partners will remain vigilant in exposing and prosecuting anyone, regardless of their position within an organization, who violates federal laws.”
Iacobelli is accused of pocketing union worker training funds to buy a $350,000 Ferrari, two solid-gold Mont Blanc pens and to install a pool and outdoor kitchen at his upscale Rochester Hills home.
Morgan-Holiefield, the widow of Holiefield who died in 2015, is alleged to have received some $30,000 in airline tickets and had the $262,000 mortgage on her and Holiefield’s home paid off using the training center funds.
A magistrate judge last week issued not guilty pleas on behalf of Iacobelli and Morgan-Holiefield who are out on bond before a jury trial slated for Sept. 25.
Iacobelli and Morgan-Holiefield are charged with criminal violations of the Labor Management Relations Act, which prohibits employers or those working for them from paying, lending or delivering money or other valuables to officers or employees of labor organizations — and from labor leaders from accepting such items. Iacobelli also is charged with tax violations.
Iacobelli was fired by Fiat Chrysler in June 2015 as vice president of employee relations and was hired by General Motors Co. in January 2016 as executive director of labor relations. GM has declined to comment on Iacobelli’s employment status.
UAW President Dennis Williams previously released a letter to union members denying the transactions between FCA officials and union negotiators had any impact on bargaining.
Prosecutors with the U.S. Attorney’s Office believe payments to union officials came from a bank account and credit cards from the training center. Improper funds also reached Holiefield through the nonprofit Leave the Light on Foundation.
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Staff writers Melissa Burden and Robert Snell contributed.