A former Fiat Chrysler Automobiles financial analyst who allegedly helped funnel blue-collar worker training funds as part of a multi-year and multimillion scheme has a plea hearing scheduled for next week.
Jerome Durden, 61, of Rochester was charged with conspiracy to defraud the U.S. and failure to file a tax return as part of an indictment unsealed last week that claims more than $1 million in UAW-Chrysler National Training Center funds instead were spent by Fiat Chrysler and union leaders on personal luxuries.
Durden, one of three charged in the case, is slated to appear Aug. 8 for a plea hearing in federal court in Ann Arbor, according to court records. Durden, who was a financial analyst in the corporate accounting department and controller of the training center, also is scheduled to appear for his initial appearance in federal court in Detroit on Friday.
His lawyer declined to comment Tuesday.
A possible plea for one of three charged in the case came the same day a former top Fiat Chrysler labor negotiator 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 was granted bond Tuesday in a federal court arraignment.
Alphons Iacobelli, 57, who last summer helped General Motors Co. negotiate with the Canadian auto union Unifor, turned in his passport as part of the $10,000 unsecured bond. U.S. Magistrate David Grand entered a not guilty plea on Iacobelli’s behalf.
Iacobelli and two others were charged in a 42-page indictment unsealed last week alleging Iacobelli and FCA and union leaders for years spent more than $1.2 million in money earmarked for training of Fiat Chrysler hourly employees instead on luxury items.
His arraignment came the same day UAW President Dennis Williams released a letter to members denying that the alleged transactions had any impact on bargaining between the UAW and Chrysler.
Iacobelli said “I can’t” when asked by reporters for comment on the allegations. His lawyer, David DuMouchel, also declined to comment.
He was 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 has been charged with tax violations related to diverting more than $1 million of funds from the UAW-Chrysler center for his own benefit and using them to pay for a $350,000 2013 Ferrari 458 Spider; lease of a private jet; two limited-edition, solid-gold Mont Blanc fountain pens costing $37,500 apiece; nearly $100,000 for a swimming pool, outdoor kitchen and outdoor spa at his Rochester Hills home; and $70,000-plus in landscaping. The indictment alleges training center funds were used to pay off hundreds of thousands of dollars in of personal credit card expenses for Iacobelli and that some $44,000 in training center dollars were used to pay off a relative’s student loan.
Authorities say payments came from a bank account and credit cards from the UAW-Chrysler National Training Center in Detroit and also were funneled through the nonprofit Leave the Light on Foundation in Detroit, which was controlled by former UAW vice president General Holiefield.
Williams in the membership letter adamantly refuted that the alleged scheme involving Iacobelli and Holiefield’s had any impact on bargaining.
“No matter what anyone says, it was not possible” Holiefield could have compromised or affected any negotiations, including the 2011 collective bargaining agreement between between the UAW and Chrysler, Williams said in the letter.
“This is certainly one of the toughest moments our union has faced in years,” he wrote. “We are heartbroken and horrified to learn a man we knew, trusted and loved was involved in these alleged misdeeds.”
The UAW said it first learned of Holiefield’s “illegal activities” in January 2016 when the U.S. Attorney’s Office contacted the union. Williams said the UAW is cooperating with the federal investigation, launched its own internal investigation into the allegations and implemented “needed reforms” at the training center to “prevent future misconduct.”
Morgan-Holiefield, 54, of Harrison Township, the wife of the late General Holiefield, appeared in court Monday. A magistrate judge issued a not guilty plea on her behalf and she is free on bond. She is accused of participating in the multi-year enrichment scheme that allegedly included paying off her $262,000 mortgage and receiving $30,000 in airline tickets to cities across the U.S.
On Tuesday, The Detroit News reported that a former UAW official, retired UAW Associate Director Virdell King, 65, is under investigation and is a potential target of the FBI probe. King has hired a criminal defense lawyer amid questions about personal purchases made through a UAW-Chrysler National Training Center credit-card account, according to two sources familiar with the investigation.
King was part of the UAW-Chrysler bargaining teams in both 2011 and 2015. She spent years on the training center’s board
More people are expected to be charged. The indictment references, but does not identify, a handful of other union and Fiat Chrysler officials accused of participating in a scheme to pay off UAW officials.
Fiat Chrysler said in a statement last week that it may sue Iacobelli and others involved in the scheme, which it said it did not know about. The automaker said when it learned of the issues in June 2015, it investigated and fired Iacobelli and Durden.
GM has declined to comment on Iacobelli’s employment status. He was hired by the Detroit automaker in January 2016 as executive director of labor relations, just six months after he was fired by Fiat Chrysler. He had been with Fiat Chrysler since 1993, most recently as vice president for employee relations.