Ex-Chrysler Executive Sentenced in UAW Training Fund Scandal

As a key figure in the Chrysler-United Auto Workers training fund scandal, Al Iacobelli expected a stiff sentence. And that’s what he got. On August 27, Iacobelli, former vice president of Fiat Chrysler Automobiles, was sentenced in U.S. District Court for the Eastern District of Michigan to 66 months in prison and 24 months of supervised release for attempting to bribe certain UAW officers with more than $1.5 million in cash and other things of value in 2015 in hopes of persuading them to drop contract demands, and for embezzling funds for his own use. Iacobelli was ordered to pay $853,522 in restitution, a $10,000 fine and a $100 assessment. He had pleaded guilty in January after being indicted last July. The actions follow a probe by the FBI, the IRS and the Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Alfons “Al” Iacobelli, now 58, a resident of Rochester Hills, Mich., abruptly left Chrysler in mid-2015, about a month before the start of collective bargaining sessions between the Auburn Hills, Mich.-based auto manufacturer and the union. It turned out that he had things to hide. National Training Center (NTC), a company-funded apprenticeship program for union members set up in 1985, was being ripped off. Based on tips from UAW members, the evidence pointed to two main culprits, Al Iacobelli and Monica Morgan, the widow of deceased UAW Vice President General Holifield. The pair were indicted in July 2017 for a multitude of offenses. According to the indictment, Iacobelli, who had started employment with General Motors in January 2016, had dipped into the NTC coffers to bribe union negotiators, an offense illegal under the Taft-Hartley Act, and to spend funds on items for himself that included a $350,000 Ferrari sports car, a home swimming pool and a pair of jewel-encrusted pens worth $38,000 each. He would plead guilty to conspiracy and tax fraud this past January. In early February, Ms. Morgan pleaded guilty to tax evasion in connection with her use of stolen NTC funds via charities set up by her husband to subsidize businesses she operated.

At sentencing, Iacobelli was contrite. “I fully accept responsibility for the mistakes I made,” he told U.S. District Judge Paul Borman. “I’m particularly sorry for the pain I’ve caused my family…I brought this on myself.” Aside from himself and Ms. Morgan, the case thus far has resulted in guilty pleas from two other Chrysler employees Jerome Durden and Michael Brown, plus United Auto Workers officials Nancy Adams Johnson, Virdell King and Keith Mickens. Federal investigators estimate that the scandal involved a grand total of $4.5 million in Chrysler-NTC funds. In a prepared statement, the UAW asserted that it had not dropped any collective bargaining demands in response to money offered by Iacobelli. “The UAW has and continues to respond to making changes to ensure this type of criminal behavior will not happen again,” the statement read.