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Detroit – The widow of former United Auto Workers Vice President General Holiefield could spend more than two years in federal prison after pleading guilty to a tax crime Tuesday as her lawyer blamed others for a $1.5 million corruption scandal that “cheated the hell out of auto workers.”

Monica Morgan-Holiefield, 54, pleaded guilty to filing a false tax return and prosecutors have agreed to drop a five-year conspiracy charge and other counts related to a scandal involving Fiat Chrysler Automobiles NV and the UAW. She is the fourth person to strike a plea deal in the scandal and admitted guilt two weeks after former Fiat Chrysler labor negotiator Alphons Iacobelli pleaded guilty.

The plea marks a stark downfall for Morgan-Holiefield, a celebrated photographer who portrayed a lavish lifestyle on social media and in society columns – a lifestyle secretly bankrolled by money that was supposed to help train blue-collar UAW workers.

“Of course she’s contrite,” her lawyer Steve Fishman said. “General Holiefield and Al Iacobelli cheated the hell out of auto workers.”

A federal investigation that started with Fiat Chrysler and the UAW has since expanded to Detroit’s other automakers and UAW training centers.

Terms of the plea deal call for Morgan-Holiefield to spend up to 27 months in federal prison and pay almost $191,000 restitution to the government. She will be sentenced June 4 by U.S. District Judge Paul Borman.

The case against Morgan-Holiefield offered a detailed look at how, according to the government, officials at Fiat Chrysler tried to tilt contract negotiations in the automaker’s favor by lavishing labor leaders with first-class airfare, expense accounts and hundreds of thousands of dollars in illegal payments. Some of the illegal payments to Morgan-Holiefield coincided with 2011 labor negotiations between Fiat Chrysler and the UAW, and were hidden behind an alias and sham companies, including a fake hospice and a deliberately misspelled firm.

Morgan-Holiefield pleaded guilty seven months after being indicted in a conspiracy that raises questions about the sanctity of labor negotiations that determine pay, benefits and working conditions for thousands of workers.

She knew nothing about the alleged conspiracy but knowingly filed a false tax return, Morgan-Holiefield’s lawyer said.

“If General Holiefield were here, he’d have a lot to answer for,” Fishman said. “This had nothing to do with her.”

General Holiefield died in March 2015.

Payments to Morgan-Holiefield started in 2011, the same year Fiat Chrysler and the UAW engaged in contract negotiations.

The money involved in the conspiracy was supposed to benefit workers at the UAW-Chrysler National Training Center.

In January 2011, the training center gave Morgan-Holiefield’s company, Wilson’s Diversified Products, a no-bid contract to provide shirts, key chains, coffee mugs and other trinkets, according to the government.

By 2012, the training center had funneled more than $425,000 to Wilson’s Diversified Products.

A company with that name does not exist in state business records. That’s because for at least two years in a row Morgan-Holiefield signed state business records with the name “Wilson’s Diversifed Products,” according to state records.

Her full name also does not appear on state business filings. Instead, the records were signed by “M. Alise Morgan.”

The payments continued amid UAW-Chrysler contract negotiations in late fall 2011 and lasted until July 2012, according to federal court records.

The money transfers were approved by Iacobelli, who at the time was a Fiat Chrysler labor negotiator, and others.

Morgan-Holiefield withdrew approximately $65,000 and spent the money on personal items, including a new home in Harrison Township.

Iacobelli faces up to eight years in federal prison after pleading guilty last month.

Two others have struck plea deals in the scandal and await sentencing in federal court:

■Former Fiat Chrysler financial analyst Jerome Durden, who prosecutors say helped transfer millions of dollars in training center funds to Holiefield, Morgan-Holiefield and Iacobelli. He faces up to 37 months in prison and is expected to cooperate with prosecutors.

■Former UAW official Virdell King, who admitted misusing funds that were intended to train and retrain blue-collar workers. She faces up to 16 months in prison and is expected to cooperate with the investigation.

Morgan-Holiefield is being held accountable for a scheme that undermined trust and work of union members, said Timothy Waters, acting special agent in charge of the FBI’s Detroit field division.

“Union workers sacrifice every pay period by having money withheld from their salary to invest in their future training opportunities,” Waters said in a statement.

In a statement issued Tuesday, the UAW said it has “taken several steps to ensure the type of wrongdoing uncovered cannot be repeated, including seeing to it that more stringent procedures are followed for awarding and reviewing vendor contracts.”

The statement continues: “It’s important to underscore that the wrongdoing here did not involve the loss of any union funds, the monies at issue did not come from union member paychecks or wages, and the misconduct did not affect the negotiation of the terms of our collective bargaining agreements. Nevertheless, the intentional misconduct by certain individuals at the training center is extremely disheartening.”

According to court records, Morgan-Holiefield received “significant payments” from her husband’s Leave the Light on Foundation, according to court records. Iacobelli and others acknowledged using Wilson’s Diversified Products and the nonprofit to conceal payments made on behalf of Fiat Chrysler to General Holiefield.

“This plea is yet another step taken towards combatting the years-long corruption that plagued the relationship between senior officials at FCA who illegally lined the pockets of UAW officials and, in this instance, the wife of General Holiefield…,” U.S. Attorney Matthew Schneider said in a statement.

Morgan-Holiefield admitted failing to report approximately $201,000 in income in 2011.

She agreed to pay $190,747 restitution for taxes owed from 2011-14. Investigators two years ago seized $103,000 from her bank account and that money will be applied to the restitution.

“In this particular case, Monica Morgan intentionally took funds which were intended to train hard-working men and women,” said Manny Muriel, special agent in charge of IRS Criminal Investigation’s office in Detroit. “Those who choose self-enrichment at the expense of others will be caught.”

rsnell@detroitnews.com

(313) 222-2486

Twitter: @robertsnellnews

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