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Detroit — United Auto Workers President Gary Jones and a top aide were accused Thursday of conspiring to embezzle as much as $700,000 in member dues and splitting the money, according to a new criminal filing that marked a dramatic escalation of a years-long corruption investigation.

The allegation was outlined in a criminal case filed against Edward "Nick" Robinson, 72, of St. Louis, president of a regional UAW community action program council. He was charged with conspiracy to embezzle union funds and conspiracy to defraud the United States, felonies punishable by up to five years in federal prison.

The criminal case deepens an alleged conspiracy involving the top echelon of the UAW and aired new allegations involving Jones, who prosecutors refer to in court filings as "UAW Official A." Sources familiar with the investigation have said that official is Jones, who has not been charged with wrongdoing and continues to lead the UAW.

The alleged conspiracy outlined in court records Thursday includes a failed cover-up, attempts to obstruct the investigation, labor leaders using burner cell phones to thwart federal agents and a promised payoff designed to shield Jones from prosecution.

Art Wheaton, an automotive industry specialist at Cornell University's Industrial and Labor Relations School, said UAW leaders will likely wait until they finish negotiating new contracts with Ford Motor Co. and Fiat Chrysler Automobiles NV and for any claims against Jones to be substantiated before asking him to step down. The union reached a tentative deal with Ford on Wednesday.

“I don’t think they really want to start that process right now in the middle of these multi-billion (dollar) negotiations. It’s quite possible he would be removed from office as soon as they are done,” Wheaton said. “I think the UAW wants to have an innocent-until-proven-guilty type of situation.”

Jones' defense lawyer did not respond to a message seeking comment Thursday.

"We take any allegation or claim about the misuse of union resources very seriously," UAW spokesman Brian Rothenberg said in a statement. "The UAW is grounded in the principle of putting our members first, and that belief has never wavered. The UAW remains focused on negotiating and finalizing strong contracts for our members —especially during this round of auto negotiations."

Robinson, meanwhile, was formally charged Thursday and accused of conspiring with Jones and other UAW officials, including "UAW Official B," to also embezzle more than $1.5 million in member dues and spend the money on private villas, cigars, liquor, meals and golf.

Sources have said "UAW Official B" is former union President Dennis Williams.

Robinson also tried to conceal the purchases by submitting phony vouchers to the UAW, according to court records.

Since 2010, Robinson cashed as much as $700,000 in checks from the UAW council and split the money with Jones, according to court records.

"After Edward N. Robinson obtained the cash, he split the hundreds of thousands in dollars in cash proceeds with UAW Official A...," Assistant U.S. Attorneys David Gardey and Steven Cares wrote in the court filing. "Between 2010 and 2017, UAW Official A deposited over $93,000 in cash into one of his personal bank accounts."

Robinson is the 12th person charged in an ongoing investigation involving federal labor law crimes and UAW leaders embezzling member dues and receiving kickbacks and bribes.

He also is the third person close to Jones charged or implicated in the scandal. The investigation has featured allegations that Jones helped orchestrate a years-long conspiracy that involved embezzling more than $1 million in member dues spent on personal luxuries.

Robinson was charged in a criminal information, which indicates a guilty plea is expected.

He is listed on Labor Department filings as president of a UAW community activist group in Missouri financed by taxes from member dues. The UAW group spent more than $190,000 on junkets for union leaders from 2014-18, according to court records. More than $45,000 was spent by the UAW on meals and liquor, more than $75,000 on golf green fees, golf clubs and merchandise, more than $8,000 on spa treatments and $1,000 at a gun range, according to the government.

Robinson helped oversee Jones' personal charity, the 5 Game Changers Fund and a separate fund controlled by Jones until last year.

That group, the Members in Solidarity Fund, is part of a long tradition within the UAW of leaders establishing funds to buy flowers for auto workers' funerals but, as The Detroit News exclusively reported earlier this year, federal investigators are questioning whether UAW officers forced staffers to contribute money and kept the cash. 

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Robinson could not be reached for comment Thursday but previously declined comment when approached by The Detroit News about the ongoing corruption scandal.

In Thursday's criminal filing, prosecutors allege Robinson and Jones tried to hide the alleged scheme.

Jones occasionally instructed Robinson to issue checks in odd amounts to conceal the embezzlement from UAW accountants, prosecutors said.

"UAW Official A also cautioned (Robinson) to avoid cashing any check in excess of $10,000 so as to avoid causing a bank to generate any currency transaction reports," prosecutors wrote.

By late 2017, with Jones a few months from ascending to the presidency of the UAW, Jones ordered a halt to the embezzlement conspiracy, prosecutors said.

“UAW Official A advised (Robinson) that they needed to halt the cash embezzlement portion of the conspiracy because of the ongoing federal criminal investigation of the United Auto Workers union and because of a new UAW position being taken by UAW Official A," prosecutors wrote.

Jones was elected UAW president in June 2018.

Since the UAW membership hasn’t stood up to demand change in union leadership, they are sending a signal “that they don’t care about all the admitted and alleged wrongdoing,” said Erik Gordon, professor at the University of Michigan Ross School of Business.

“So far, the union cannot claim to be the victim. The union has backed them up and stood by them,” Gordon said.

The criminal charge reflects the government's ongoing focus on a UAW Region 5 office near St. Louis. The branch is the UAW's largest region, covering 17 states, including Missouri, Texas and California.

Federal agents raided the office Aug. 28, part of a broader series of searches at six locations in four states. The raids included searches at the home of Jones, former President Dennis Williams and the home of Region 5 Director Vance Pearson.

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During the raid at Jones' home, investigators seized more than $32,000 cash and a similar set of Titleist golf clubs purchased during one of the UAW junkets paid for by the UAW community activist group headed by Robinson.

Pearson, who was arrested in September and charged with money laundering, mail and wire fraud, and embezzling union funds, was later suspended. He served as Jones' deputy until last year, sat on the UAW governing International Executive Board, is the first sitting UAW official charged in the corruption scandal.

In January 2019, seven months after Jones became president, he met with Robinson and Pearson and attempted to cover-up the alleged scheme, prosecutors said.

"UAW Official A promised to provide a sham job to a relative of (Robinson) in order to 'take care of' the relative if Robinson agreed to falsely take sole responsibility for the ... cash embezzlement portion of the conspiracy, thereby attempting to protect UAW Official A from federal criminal prosecution," prosecutors wrote.

UAW Official A and Robinson met again in March and talked about whether the government had obtained documents from the UAW and hotels involved in the alleged embezzlement scheme, prosecutors said.

"UAW Official A told (Robinson) that he wished they 'burned the records,'" prosecutors wrote.

Four months later, on July 13, a fire tore through UAW headquarters in Detroit, damaging one floor. The fire appears to have started in the IT department, according to court records.

Fire officials determined that the blaze started in a storage area with unused electronics and was not suspicious, Detroit Deputy Fire Commissioner David Fornell said Thursday. "We do not think it's arson."

The same month, union officials continued trying to cover up the alleged embezzlement scheme, the government alleges.

"Pearson told (Robinson) he would get a 'burner phone' for Robinson, so that the other conspirators could talk to Robinson over the telephone without fear of being intercepted on a wiretap by federal criminal investigators," prosecutors wrote.

Pearson also offered advice.

"Pearson advised (Robinson) that if Robinson had anything incriminating 'at your house, then get rid of it,'" prosecutors wrote.

Another top Jones deputy and one of the union's most powerful officers also are helping federal prosecutors build a criminal case against the UAW president for allegedly embezzling union funds.

Former deputy Danny Trull and retired UAW Secretary/Treasurer Gary Casteel have met with investigators and provided an insider's view of the alleged conspiracy and cover-up involving more than $1 million spent on private villas in California, luxury meals, cigars and alcohol, according to federal court records and six sources familiar with the investigation.

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Tour golf courses and resorts frequented by UAW officials in Palm Springs, Calif., where the union has spent more than $1 million in recent years. Robert Snell, The Detroit News

Wheaton, the auto industry specialist from Cornell, said he expects the union's members to be upset about the government's allegations against Jones.

“There’s no question it’s extremely disturbing for the members if (Jones) was embezzling the money ...," he said.

Wheaton won’t be surprised if Jones is out as UAW president in November.

“If he is guilty of embezzling those funds, then he should go to jail and he should actually be fired as soon as they have that information proven,” Wheaton said.

“I just hope they get this settled," he added. “It’s going to help improve the long-term vision of the UAW to make sure we keep corruption out of the unions. There’s no place for it.”

rsnell@detroitnews.com

Twitter: @robertsnellnews

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