FCA scandal figure Al Iacobelli catches prison break after helping feds

Detroit — Alphons Iacobelli, the former Fiat Chrysler Automobiles NV vice president who bought a Ferrari, bejeweled pens and a backyard pool with money siphoned during a conspiracy involving the automaker and the United Auto Workers, received a prison break Monday.

U.S. District Judge Paul Borman cut his 5½-year sentence by 18 months because Iacobelli cooperated with an ongoing federal investigation and due to the impact COVID-19 is having inside America's prison system.

The move lightens the stiffest sentence issued during a crackdown on auto industry corruption that has led to 15 convictions and reshaped the top ranks of the auto industry and labor movement. Former UAW presidents Gary Jones and Dennis Williams have pleaded guilty and are awaiting sentences and prosecutors are implementing prolonged oversight of the union to stem corruption.

A release date for Iacobelli, 61, was unclear Monday. But he could be freed in early 2022 or sooner based on credits he receives for good conduct while in prison. He was sentenced in August 2018 after pleading guilty to one count of conspiracy to violate the Labor Management Relations Act and one count of subscribing a false tax return.

The government, in a sealed filing, requested Iacobelli’s sentence be reduced to 52 months, saying he cooperated with criminal and civil investigations targeting the UAW and training centers operated jointly between the union and auto companies.

Iacobelli, in another sealed filing, tried to cut his sentence to no more than three years.

“Defendant's counsel asserts that because of Iacobelli's cooperation, a member of defendant's family suffered a financial injury in his employment likely linked to his cooperation,” the judge wrote Monday.

“Defendants counsel further stated that his family residence is subjected to 'drive-bys,' that they find intimidating,” the judge added. “Defendant further asserts that because of the COVID-19 pandemic, he has not been able to have family visits, and has significantly limited ‘yard time’ during his incarceration.”

Iacobelli is among several auto industry figures who received post-sentencing reductions thanks to cooperating with the government. His lawyer, David DuMouchel, said: "I’m grateful that the government filed it and I'm grateful that the court granted it."

Disgraced UAW official spared prison after helping feds

The specter of more people being charged during the ongoing investigation dominated Iacobelli's sentencing. The full extent of Iacobelli's ongoing cooperation is sealed in federal court, but prosecutors referred to additional targets in court filings.

Last month, U.S. Attorney Matthew Schneider said the investigation involving individuals is ongoing. The conspiracy involving Iacobelli dated to at least 2009 and was designed to wring concessions from the UAW by funneling money and illegal gifts to labor leaders.

Iacobelli admitted paying more than $1.5 million to UAW officers and employees to sway union contract negotiations during a scheme that involved funneling money and illegal gifts to labor leaders through a training center funded by Fiat Chrysler. Those illegal payments included $1,000 pairs of designer shoes, first-class travel, furniture, lavish meals, parties, jewelry and custom-made Italian watches.

The scheme involved at least three co-conspirators: Fiat Chrysler, the UAW and the UAW-Chrysler National Training Center, prosecutors said.

Iacobelli's use of Fiat Chrysler money drew headlines. He was accused of using more than $1 million in Fiat Chrysler funds on a Ferrari 458 Spider convertible, which he outfitted with an “IACOBLI” vanity plate, a pool at his Rochester Hills mansion and two solid-gold, bejeweled Montblanc fountain pens that cost $35,700 each.

Federal investigators have seized both pens. Iacobelli unloaded the Ferrari during the investigation. He also has agreed to pay $835,523 in restitution to the Internal Revenue Service.

The sentence reduction comes even though prosecutors and Fiat Chrysler executives have not finalized a deal to resolve a federal criminal investigation into whether executives conspired to pay bribes and break labor laws.

The Detroit News reported in 2019 that negotiations were focused on Fiat Chrysler submitting to government oversight for up to five years, paying less than $50 million in penalties and agreeing to make broad institutional changes.

rsnell@detroitnews.com