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Detroit — The widow of United Auto Workers Vice President General Holiefield was sentenced to 18 months in federal prison Friday for a tax crime intertwined in a widening federal investigation of the auto industry and labor movement.

Monica Morgan-Holiefield, 55, of Harrison Township, is the first person sentenced in a scandal that has led to criminal charges against seven people and reshaped the top ranks of the auto industry as FBI agents investigate all three Detroit automakers.

Wearing a funeral black dress, she stared straight ahead as U.S. District Judge Paul Borman issued the sentence that capped the downfall of an accomplished photographer who prosecutors say succumbed to greed, living a high-flying lifestyle with money flowing from a conspiracy involving Fiat Chrysler Automobiles NV and the UAW.

"This was not some slip-up," Assistant U.S. Attorney David Gardey told the judge. "It was a cold and calculated effort to get money for herself and her husband ... to satisfy simple greed."

The scandal has aired damning allegations about Fiat Chrysler and the UAW conspiring to violate 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 makes it illegal for labor leaders to accept such items.

The sentencing Friday illustrated the gulf between prosecutors and Morgan-Holiefield's defense lawyer, Steve Fishman. He wanted her to serve a probationary sentence for a single tax crime, while the government wanted Borman to consider the underlying conduct and illegal benefits they say she enjoyed. The benefits include more than $32,000 worth of flights, a $43,300 pool and $260,000 to pay off her mortgage.

Borman said the crime was not merely a straightforward tax offense.

"The defendant failed to report the source of income from criminal activity," he said.

Morgan-Holiefield benefited "handsomely" from illegal payments from Fiat Chrysler to her late husband and used shell companies to hide the income and criminal activity, prosecutors said. The payments were part of a broader effort by Fiat Chrysler to keep UAW leaders "fat, dumb and happy" and wring concessions favoring the automaker, according to the government.

In pushing for a 27-month prison sentence, prosecutors labeled Morgan-Holiefield a fraudulent tax cheat who stole $190,000 from taxpayers to bankroll a lavish lifestyle. Her lawyer said Morgan-Holiefield should be spared prison because she has paid more than $100,000 in restitution and is unlikely to reoffend.

Morgan-Holiefield, who also was fined $25,000 and ordered to pay $190,747 in restitution, will be followed soon by five others who have struck plea deals with the federal government, including former Fiat Chrysler labor negotiator Alphons Iacobelli. 

“Morgan was punished for cheating on her taxes and for helping to conceal hundreds of thousands of dollars in illegal payments from FCA executives to Morgan and her husband ...," U.S. Attorney Matthew Schneider said in a statement. “The court’s sentence for Morgan vindicates the honest tax payers who properly report their income and pay their taxes, while sending a strong signal to those who would steal from everyone in the community through tax fraud.”

Morgan-Holiefield pleaded guilty in February to filing a false tax return and prosecutors agreed to drop a five-year conspiracy charge and other counts related to the scandal. Morgan-Holiefield admitted failing to pay $190,747 in taxes from 2011-2014.

Two dozen supporters attended the sentencing and the reception line waiting to embrace Morgan-Holiefield stretched halfway to the rear of Borman's courtroom. She left the courthouse flanked by friends and will report later to an undisclosed prison.

Borman cited her long history of community involvement in varying downward from a 24-30 month sentencing guideline range. He also noted 45 letters written by supporters and public officials, including state Rep. Sherry Gay-Dagnogo, a Democrat whose district covers northwest Detroit, and media magnate Kevin Adell.

Borman declined to release the letters, which are sealed in federal court.

In asking Borman for leniency, Morgan-Holiefield's lawyer faulted the media for dragging her "through the public mud." He faulted the prosecutor for trying to penalize Morgan-Holiefield for the illegal payments, instead of just a tax crime.

"He wants you to say 'she's just as bad as her late husband, just as bad as Al Iacobelli, and you should nail her,'" Fishman told the judge.

Fishman cited the dozens of sealed letters from supporters, which prove Morgan-Holiefield has spent her life helping people.

"That counts more than people who find the Lord after finding the courtroom," Fishman said.

Gardey, the prosecutor, read the letters and was left with the impression of a savvy businesswoman, a strong-willed intelligent entrepreneur. Morgan-Holiefield flew first-class and stayed at resorts with money from Fiat Chrysler that was supposed to benefit blue-collar UAW workers, he said.

"She is someone who knew exactly what she was doing and chose to commit a crime," Gardey said.

Federal prosecutors have labeled the United Auto Workers and Fiat Chrysler Automobiles NV as co-conspirators in a widening corruption scandal, an allegation at odds with claims the labor union and automaker were victimized by rogue employees.

Federal prosecutors say the union and Fiat Chrysler conspired from before 2009 through 2015 to violate the Labor Management Relations Act and the automaker enabled nepotism to flourish at a blue-collar training center. 

“The misconduct by certain individuals in this case has been disturbing," UAW spokesman Brian Rothenberg said in a statement Friday. "Importantly, however, the wrongdoing did not involve union funds or affect our collective bargaining agreements. The UAW has taken strong measures to prevent a reoccurrence of this type of misconduct and our new leadership team continues to oversee improvements in our operations and financial controls.”  

rsnell@detroitnews.com

Twitter: @robertsnellnews

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