Ex-UAW official charged in widening Fiat Chrysler fraud probe

By Eric DuVall  |  Aug. 19, 2017 at 3:16 PM
share with facebook
share with twitter
| License Photo

Aug. 19 (UPI) -- A retired leader of the United Auto Workers was the fourth person charged in a widening corruption probe involving the union and executives at Fiat Chrysler.

Federal prosecutors said retired UAW Associate Director Virdell King conspired with other union leaders and executives at Fiat Chrysler to steal more than $4.5 million from the company's worker training fund for their personal use. The money was supposed to be used to operate the UAW-Chrysler National Training Center in Detroit.

The allegations stated King, 65, of Detroit, regularly dipped into the fund to purchase designer shoes, clothing, jewelry and luggage, The Wall Street Journal reported. She was also charged with making $40,000 in purchases for other UAW officials, though the union said those employees were not aware she had used stolen money to buy them concert tickets and golf equipment.

Prosecutors said she made the purchases using credit cards issued through the training center.

At the head of the alleged scheme was Al Iacobelli, the lead labor negotiator for Fiat Chrysler. Prosecutors said he stole $1 million from the training fund from 2009 to 2014 to purchase things including a $350,000 Ferrari sports car, $100,000 in home improvements and $37,500 in Mont Blanc pens.

Prosecutors said Iacobelli encouraged union leaders to use the credit cards, as well, leading to questions about whether the alleged theft influenced how union leaders approached contract negotiations during that time.

"Iacobelli told senior UAW officials that they could use their NTC credit cards to make personal purchases, stating, 'if you see something you want, feel free to buy it,'" prosecutors allege in court documents.

According to the Detroit Free Press, Iacobelli encouraged the liberal spending policy with the hope it would encourage UAW officials to take "company-friendly positions" in labor negotiations. Both the UAW and Fiat Chrysler denied that was ever the case.

The worker training fund was set up between the union and Chrysler in the 1980s as a means to further the education of auto workers. The company's annual contribution to the training center has ranged from $13 million to $31 million in recent years.

In a statement, UAW President Dennis Williams said the organization was disappointed at King's conduct, but said an internal investigation concluded none of the individuals responsible still work for the union.

The widow of a former UAW vice president and a financial consultant for Fiat Chrysler who prosecutors said helped cover up the fraud have also been charged.

Related UPI Stories
Trending Stories