Ex-Fiat Chrysler executive gets 5.5 years in prison for UAW scandal

By: Mary Beth Almond | Rochester Post | Published October 9, 2018

Photo by Katherine Welles / Shutterstock.com

ROCHESTER HILLS — Former Fiat Chrysler executive Alphons Iacobelli was sentenced to 5 1/2 years in federal prison for tax evasion and his role in a scheme to siphon millions from the UAW-Chrysler National Training Center in Detroit.

Iacobelli, 58, of Rochester Hills, was sentenced seven months after pleading guilty to one count of conspiracy to violate the Labor Management Relations Act and one count of subscribing a false tax return. He agreed to pay $835,523 in restitution.

“The court’s sentence recognizes the serious harm done to rank-and-file union members who were betrayed by their UAW leadership, who were bribed by Fiat Chrysler and its executives,” U.S. Attorney Matthew Schneider said in a statement. “Labor management corruption poisons and undermines the collective bargaining process, and today’s sentence demonstrates that it will be vigorously prosecuted.”

According to the federal complaint, Iacobelli — who was involved in the conspiracy from 2009 through June 2015 — conspired with others at FCA to make prohibited payments of more than $1.5 million and provide other items of value for the personal use of senior UAW officials.

According to court documents, Iacobelli admitted that when he conspired to make the illegal payments to senior UAW officials, he did so while acting in the interest of his employer, FCA — in an effort to obtain benefits, concessions and advantages for FCA in the negotiation, implementation and administration of the collective bargaining agreements between FCA and the UAW.

The illegal payments included paying off the mortgage on a union official’s home, first-class airline travel, lavish meals and parties, designer clothing, furniture, jewelry, and custom-made watches.

“Mr. Iacobelli concealed his income from the IRS and swindled the American public,” Manny Muriel, special agent in charge of the IRS-Criminal Investigations Detroit Field Office, said in a statement. “Today’s sentence should send a clear message that IRS-CI will aggressively pursue those who choose to violate federal law and interfere with our nation’s tax laws.”

Top executives from Fiat Chrysler and the UAW continue to deny that the scandal had any effect on the bargaining process.

“FCA U.S. firmly restates that it was a victim of illegal conduct by Al Iacobelli and certain other rogue individuals who formerly held leadership roles at the National Training Center,” an FCA spokesperson said in a statement. “FCA U.S. also confirms that the conduct of these individuals — for their personal enrichment and neither at the direction nor for the benefit of the company — had no impact on the collective bargaining process. Rather, the behavior involved a small number of bad actors who stole training funds entrusted to their control and co-opted other individuals who reported to them to carry out or conceal their activity over a period of several years.”

The UAW issued the following statement: “We are appalled by the conduct of Mr. Iacobelli in his capacity as the co-head of the National Training Center to defraud and steal from the NTC. As he has admitted, Mr. Iacobelli stole hundreds of thousands of dollars of NTC monies to build a luxury swimming pool and outdoor kitchen at his house for himself. He stole NTC monies to buy a $350,000 Ferrari for himself. He stole NTC monies to buy jewel-encrusted pens for $37,000 a piece for himself. And he stole NTC monies to pay over $1 million in personal credit card bills for himself and his wife. Whatever may be said about the misconduct of others at the NTC, these thefts from the NTC by Al Iacobelli had nothing to do with trying to influence collective bargaining. They had everything to do with Al Iacobelli’s personal greed. And the NTC has now sued Mr. Iacobelli to recover the millions of dollars he stole from it.”

The statement continued, “There are many layers of checks and balances in our contract negotiations and ratification, including membership voting, and we are confident the terms of our UAW contracts were not impacted by Iacobelli’s fraudulent conduct at the NTC.  The UAW has and continues to respond by making changes to ensure this type of criminal behavior will not happen again.”

Iacobelli is the highest-ranking FCA official charged so far in the case.

Iacobelli’s lawyer, David DuMouchel, of Butzel Long PC, could not be reached for comment by press time.