LINKEDINCOMMENTMORE

Detroit — Three auto industry officials were sentenced to federal prison Wednesday for their roles in a corruption conspiracy involving Fiat Chrysler Automobiles and the United Auto Workers but received substantial breaks because they are leading investigators to new criminal targets.

The sentencing hearings for two former Fiat Chrysler executives and a UAW official were dominated by hints of pending criminal charges. Prosecutors leveled the hints more than three years into an ongoing investigation that has led to the convictions of seven people, caused upheaval at the top ranks of the auto industry and raised questions about the sanctity of labor negotiations.

The scandal, so far, has implicated former UAW President Dennis Williams, the late Fiat Chrysler Chief Executive Sergio Marchionne and others during an investigation focused on auto executives funneling illegal payments from a training center to union executives to buy labor peace. Agents also are investigating whether UAW executives misspent member dues on personal luxuries and if labor leaders at General Motors Co. and Ford Motor Co. received money or benefits through their tax-exempt nonprofits.

During sentencing hearings Wednesday, federal prosecutors referenced as many as five unindicted co-conspirators, including former UAW Vice President Norwood Jewell, who retired in January after his home was raided by investigators. Jewell was the guest of honor at a party paid for with more than $30,000 worth of training center funds that featured “ultra-premium” liquor and strolling models who lit labor leaders’ cigars.

Those sentenced Wednesday included former Fiat Chrysler financial analyst Jerome Durden, who controlled the finances at the UAW-Chrysler National Training Center. Prosecutors say auto executives used the training center to funnel money to union officials and lavish labor leaders with luxuries that included $1,000 shoes, a shotgun for Jewell, luxury hotels, flights and a pool for the late UAW Vice President General Holiefield.

Durden was the first person charged last year and his cooperation has led to convictions of five other Fiat Chrysler and UAW officials.

"He got in early and he is in a unique position to substantially assist in the investigation and prosecution of others," Assistant U.S. Attorney Erin Shaw told U.S. District Judge Paul Borman. "Make no mistake, he was a key player in this case."

Durden, former Fiat Chrysler executive Michael Brown and UAW official Keith Mickens are so valuable to the government, and providing ongoing cooperation about crimes involving other industry officials, that they won't have to report to prison for at least six months.

If their continuing cooperation is substantial, the trio could spend less time behind bars.

Durden, 62, of Rochester, was sentenced to 15 months in federal prison for filing misleading tax returns that concealed the labor conspiracy and helping steer more than $386,400 to Holiefield's phony charity, the Leave the Light On Foundation.

Holiefield died in March 2015 before he could be charged with a crime. His widow, Monica Morgan-Holiefield, was sentenced to 18 months in federal prison for failing to report income funneled through the training center, including $32,000 worth of flights, a $43,300 pool and $260,000 to pay off her mortgage.

On Wednesday, Durden was a teary, sweaty and shamed man.

"I truly regret my involvement," he told the judge while choking back tears and wiping sweat from his brow. "I've brought dishonor to myself, and shame."

Durden served a pivotal role, leading prosecutors to senior Fiat Chrysler executives, including former vice president Alphons Iacobelli, and high-ranking UAW officials, including Mickens, who was Holiefield's right-hand man.

While reviewing financial records, investigators kept noticing Durden's name on documents, a sign he was "moving money around" illegally, Shaw said.

"He made bad decisions over, and over and over again," Shaw said.

Yet Durden has spent the past three years cooperating with prosecutors, help that shrunk a potential three-year prison sentence.

Brown, a former Fiat Chrysler Automobiles executive who helped run the UAW-Chrysler National Training Center, was sentenced to one year and a day in prison for helping cover up the conspiracy.

Brown, 61, of West Bloomfield Township, the automaker's former director of labor relations, deliberately provided misleading and incomplete testimony during the grand jury investigation, enabling the conspiracy to continue for years.

He knew that training center funds paid for Jewell's party, which included a $3,000 tab for wine in bottles with custom labels featuring the UAW vice president's name.

He knew Fiat Chrysler executives gave more than $1.5 million to UAW leaders, including Holiefield, to "grease the skids" of labor negotiations. And he knew Fiat Chrysler paid for UAW leaders to golf, dine and stay in Palm Springs, California, the prosecutor said.

"He covered up everything," Shaw told the judge.

Brown, dressed in a black suit, stared straight ahead as the prosecutor contradicted letters from the disgraced auto executive's supporters and defense lawyer who portrayed Brown as a "straight arrow," loyal to a fault.

That straight arrow provided misleading testimony to a federal grand jury in December 2015, Shaw said.

"In a moment in life when Brown most needed to be a straight arrow," Shaw said, "he wasn't."

Brown asked the judge to render a "just decision" but did not apologize or explain his crime. 

Brown, who is retired with a $7,400 monthly pension, greeted a dozen supporters in the courtroom with hugs, grins and a giggle.

Mickens, meanwhile, also was sentenced to a year and a day in prison. He was sentenced seven months after striking a plea deal with prosecutors that could have sent him to prison for 30 months.

Instead, he'll likely be home 10 months after reporting to prison because he continues to cooperate with the government.

The 65-year-old Clarkston resident admitted buying more than $7,000 worth of personal items with money from Fiat Chrysler that was supposed to help train blue-collar workers and used more money to help Holiefield buy a pool.

In all, Mickens approved more than $700,000 in illegal payments from Fiat Chrysler to Holiefield and Holiefield's wife Monica Morgan, part of a broader plan by the automaker to keep labor leaders "fat, dumb and happy," according to the government.

Mickens helped prosecutors convict former UAW official Nancy Adams Johnson. She served as Jewell's top administrative assistant and received tens of thousands of dollars in illegal payments and benefits from Fiat Chrysler, including $1,100 designer shoes, first-class flights to California and resort stays.

Adams Johnson pleaded guilty in July because she knew Mickens was willing to testify, prosecutors said. She faces up to 18 months in prison on Nov. 19.

Adams Johnson has implicated Williams, the former UAW president. She told investigators that Williams directed subordinates to use funds from Detroit’s automakers, funneled through training centers, to pay for union travel, meals and entertainment, a move that was designed to save the UAW money. 

Williams retired in June — with $100,000 worth of brand new boats — to the UAW Black Lake Conference Center, a 1,000-acre retreat in northern Michigan.

The UAW is using nonunion labor to build Williams a three-bedroom, three-and-a-half bath, 1,885-square-foot cottage on the shores of Black Lake.

The Williams cottage will feature granite counters, stainless-steel appliances, a wood-burning fireplace, a wine cooler, a patio and a secret room hidden behind a bookshelf door.

UAW spokesman Brian Rothenberg said contract negotiations were not impacted by any crimes committed during the conspiracy.

“Union members and FCA officials in this case acted out of personal greed, enriching themselves while damaging the reputations of their organizations," Rothenberg said in a statement.  "Fortunately, the UAW has layers of checks and balances in contract negotiations, including voting by the entire membership, and we are confident the terms of our agreement were never impacted.”

Mickens, meanwhile, expressed regret Wednesday.

"I've done wrong, I broke the law and I'm deeply ashamed of my actions," Mickens told the judge. "I have no one to blame but myself and will regret this for the rest of my life.

"I helped undermine and stigmatize an institution I spent my life trying to build."

And he betrayed the trust of rank-and-file union members, Assistant U.S. Attorney David Gardey told the judge, noting that UAW members often refer to themselves as brothers and sisters.

"It was that responsibility, the trust placed in him by his brothers and sisters that he breached," Gardey said.

rsnell@detroitnews.com 

(313) 222-2486

Twitter: @robertsnellnews

LINKEDINCOMMENTMORE
Read or Share this story: https://www.detroitnews.com/story/business/autos/chrysler/2018/11/07/uaw-and-fiat-chrysler-officials-face-reckoning-federal-court/1917404002/