Ex-UAW Chieftain Gary Jones Pleads Guilty to Corruption, Tax Evasion

The Gary Jones era at the United Auto Workers was brief. But if Jones wants a brief prison sentence, he’ll be at the mercy of prosecutors. Two days ago, June 3, Jones, UAW president until last November, pleaded guilty in U.S. District Court for the Eastern District of Michigan to embezzlement, racketeering and tax fraud related to his role in the diversion of between $1 million and $1.5 million in union funds toward personal luxuries such as vacations, golf outings and cigars, and their coverup. He is set for sentencing on October 6. Thus far, more than a dozen union and auto industry officials have been convicted following an ongoing probe by the FBI, the IRS and the Labor Department’s Office of Labor-Management Standards and Office of Inspector General. A federal takeover of the 400,000-member UAW remains a possibility.

Union Corruption Update has been following this phase of the probe … Read More ➡

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Former UAW President Gary Jones Charged with $1M+ Embezzlement

If a government takeover of the United Auto Workers looked like a possibility a few days ago, that possibility just became more real. Yesterday, March 5, Gary Jones (in photo), former president of the United Auto Workers, was charged in an information in Detroit federal court for his role in the embezzlement of well over $1 million in funds from the union, enabling himself and other union leaders to splurge on indulgences unrelated to UAW business. Forced from his post in November, Jones is the biggest catch yet in a union-auto industry probe that so far has netted over a dozen guilty pleas. As this is an information, not an indictment, a plea deal is virtually certain. The actions follow a probe by the FBI, the IRS and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Union Corruption Update has covered this case since it … Read More ➡

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UAW Chieftain Gary Jones Resigns as GM Department Scandal Widens

Gary Jones’ tenure as head of the United Auto Workers was brief. But he and the union are preparing for what may be a long ordeal. On November 20, Jones, beset by a slew of federal corruption charges involving extensive illegal payoffs exacted from vendors by ex-officials of the UAW’s General Motors Department, abruptly resigned as president. Nine days later, he ended his union membership. The actions occurred shortly after the UAW executive board filed paperwork to expel him and a regional director, Vance Pearson. While Jones has not been accused of anything (yet), his home was one of several sites raided in August by federal agents. In a related event, GM last month filed a racketeering suit against Fiat Chrysler on grounds that the latter misused the collective bargaining process to facilitate a merger.

If these were normal times, the 400,000-member, Detroit-based United Auto Workers might be … Read More ➡

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Top Ten Union Corruption Stories of the Year

If one form of union corruption dominated 2020, it was benefit fraud. And there were quite a few huge hauls. In California, the International Longshore and Warehouse Union-Pacific Maritime Association health plan was fleeced twice over. In one case, four persons made off with $3 million. In the other, a Los Angeles-area chiropractor, Mahyar David Yadidi aided by two associates, collected reimbursements worth $4.8 million for nonexistent or unnecessary services. That’s not even including a separate $3 million ILWU scam resulting in sentences for three persons back in 2019. In New York City, executives of the Navillus construction firm were indicted for their roles in a scheme allegedly depriving members of over $1 million in retirement benefits. And in a shocker, an external audit and a long internal memo accused longtime International Association of Fire Fighters President Harold Schaitberger and another IAFF official of misusing $6 million in union … Read More ➡

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Justice Department, UAW Reach Settlement on Reform Plan

Dennis Williams

The United Auto Workers knew a settlement was coming. Now comes the hard part: compliance. This past Monday, December 14, Matthew Schneider, U.S. Attorney for the Eastern District of Michigan, announced that his office and the UAW had settled a civil suit filed earlier that day against the union based on acts of fraud, embezzlement and tax evasion committed by certain among its members. Criminal investigations had led to charges and convictions of 15 individuals, mostly union officials, including recent UAW Presidents Gary Jones and Dennis Williams. Most thus far have received sentences. The consent order, which requires court approval, creates an Independent Monitor possessed of the authority for up to six years to investigate and discipline corruption.

Union Corruption Update has covered this two-part investigation many times (such as here and here) since it broke open in July 2017. The 400,000-member, Detroit-based United Auto Workers, though … Read More ➡

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Ex-UAW Vice President Joe Ashton Sentenced for Taking Bribes, Kickbacks

The unfinished business of the United Auto Workers scandal is nearing its end. A week ago, on November 17, Joe Ashton, former vice president of the UAW’s General Motors Department, was sentenced in U.S. District Court for the Eastern District of Michigan to 30 months in prison for receiving over $250,000 in illegal bribes and kickbacks from a union vendor, and for conspiring with two fellow union officials to launder the proceeds. He had pleaded guilty last December. Several ranking UAW officials, including its two previous presidents, already have pleaded guilty to embezzlement, racketeering and tax fraud charges. The actions follow a joint investigation by the FBI, the IRS and the Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Ashton, now 72, a resident of Ocean View, N.J., is a retired UAW vice president. He now is also one 15 defendants convicted of financial crimes related to … Read More ➡

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Labor Department Seeks Tougher LM-2 Form to Fight Corruption

Despite all the legal disincentives, many of the people running our unions continue to engage in fraud and embezzlement. In response, the U.S. Department of Labor has come up with new forms of prevention. On September 30, the DOL’s Office of Labor-Management Standards (OLMS) unveiled a series of changes to its LM-2 annual reporting document for large unions; i.e., unions taking in at least $250,000 a year. First, these labor organizations must spell out more fully how they pay for assets, hotel stays, restaurants and other items that all too often are hidden under generic categories such as “miscellaneous.” Second, the largest of these unions – those with annual receipts of at least $8 million – must file a new “long form” LM-2. Labor leaders understandably oppose this. But the proposal addresses real financial crimes, which though frequently detected and punished, require more detailed monitoring.   

Annual financial reporting by unions … Read More ➡

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Ex-UAW President Dennis Williams Charged with Embezzlement

The fall of Dennis Williams seemed as inevitable as it was anticlimactic. Yesterday, August 27, Williams, who was president of the United Auto Workers during 2014-18, was charged in Detroit federal court with conspiracy to embezzle funds from the 400,000-member union for his own use, including $56,000 for housing and luxury travel. His immediate successor, Gary Jones, had pleaded guilty in June to embezzlement, racketeering and tax fraud related to his diversion of over $1 million in UAW funds. As Williams allegedly conspired with Jones in some of these thefts, he will have a hard time convincing a jury of his innocence. More than a dozen union officials and auto executives thus far have pleaded guilty as part of an ongoing probe of the union by the FBI, the IRS and the Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Dennis Williams, now 67, was elected presidentRead More ➡

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Ex-UAW Official Sentenced for Collecting $2M in Shakedowns

The wages of corruption at the United Auto Workers continue to be paid. On February 18, Michael Grimes, a retired senior official at the Detroit-based union’s General Motors Department, was sentenced in U.S. District Court for the Eastern District of Michigan to 28 months in prison and a year of supervised release for honest services fraud and money laundering conspiracy related to his extraction of roughly $2 million in payoffs from UAW vendors through multiple schemes. He also must pay about $1.5 million restitution plus a $200 assessment. Grimes had pleaded guilty in September after being charged in August. The actions follow a probe by the FBI, the IRS and Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Grimes, now in his mid-60s, a resident of Fort Myers, Fla., had served as a $150,000-a-year administrative assistant to United Auto Workers Vice President Estrada. Apparently, it wasn’t enough. … Read More ➡

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UAW’s Pearson Pleads Guilty to Embezzlement

The outcome couldn’t have been more inevitable for Vance Pearson. And it couldn’t have been less welcome for the people ranking above him. Last Friday, February 7, Pearson, former regional director for the United Auto Workers and a member of the union’s international board, pleaded guilty in Detroit federal court to conspiracy to embezzle hundreds of thousands of dollars in union funds, enabling him and other UAW officials to live large – or at least larger – for nearly a decade. In so doing, he may have brought prosecutors one step closer to bringing charges against former Auto Workers President Gary Jones and his immediate predecessor, Dennis Williams. The action follows a probe by the FBI, the IRS, and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

As Union Corruption Update indicated a couple of weeks ago, Vance Pearson, now 58, a resident of … Read More ➡

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