Ex-UAW official pleads not guilty in fraud, money laundering case

Kalea Hall Robert Snell
The Detroit News

Detroit — Mike Grimes, a former United Auto Workers senior leader, entered not-guilty pleas on federal charges of wire fraud conspiracy and money laundering on Wednesday afternoon in U.S. District Court.

Grimes, 65, of Fort Myers, Florida, was charged earlier this month. The charges could send Grimes to federal prison for up to 20 years. 

Former UAW official Mike Grimes.

Grimes was given a $10,000 unsecured bond. He must surrender all international travel documents and his travel will be restricted to only Florida and Michigan. He is also not allowed to possess firearms. 

Grimes and his lawyer Michael Manley declined to comment. 

He is expected to plead guilty in federal court in Ann Arbor on Sept. 4.

Grimes, administrative assistant to UAW Vice President Cindy Estrada until last year, received $1.99 million in kickbacks from union vendors, the government said. Vendors were awarded contracts from the UAW-GM training center to produce UAW-branded merchandise in exchange for paying bribes and kickbacks.

Grimes is the ninth person charged in an ongoing federal investigation into UAW and auto industry corruption. 

Grimes and two other unnamed union officials were allegedly enriching themselves by deceptively soliciting, influencing and obtaining contracts for two vendors. Grimes and the two unnamed UAW officials demanded and accepted hundreds of thousands of dollars from the two vendors, prosecutors said.

In 2006, for example, Grimes recommended "Vendor A,"  a family-operated business that sold American-made custom logo products, including clothes and accessories, to provide 23,000 watches to the UAW-GM training center, according to court records. After awarding the contract, Grimes demanded a loan to buy property in Rose Township in northern Oakland County, prosecutors said. The vendor refused and Grimes threatened to cancel the watch contract, according to court records.

To hide the bribes, the vendor wrote checks payable to "KKG Consulting," which prosecutors called a sham company. 

From 2010 through 2017, the vendor paid Grimes almost $900,000, prosecutors said, 

The Detroit News previously reported that the two other unnamed officials involved in the vendor kickbacks scheme are former UAW Vice President Joe Ashton and his top lieutenant, Jeff Pietrzyk.

In 2011, Ashton, Pietrzyk and Grimes sat on the UAW team that negotiated a new contract with GM, serving alongside former UAW President Dennis Williams. 

Grimes and Williams also served on the 2015 negotiating team alongside Estrada. Grimes was Estrada's top assistant and served on the board of her personal charity.


Twitter: @bykaleahall