Federal Court Sentences Former Fiat Chrysler Executives, UAW Official in Ongoing Investigation of Illegal Payoff Scheme

DETROIT, MI – The U.S. District Court for the Eastern District of Michigan has sentenced three defendants as part of an ongoing criminal investigation into a multi-year scheme in which Fiat Chrysler Automobiles US LLC (FCA) executives made payoffs to senior United Auto Workers International Union (UAW) officials involved in collective bargaining agreements between the union and the company. 

All three defendants - Michael Brown, Jerome Durden, and Keith Mickens –­ pleaded guilty to crimes related to a conspiracy to direct millions of dollars in prohibited payments to themselves and their co-conspirators in violation of the Labor Management Relations Act (LMRA).

The November 7, 2018, sentencing continues an ongoing investigation by the U.S. Department of Labor’s Office of Labor Management Standards (OLMS) Detroit-Milwaukee District Office, the Department of Labor’s Office of Inspector General, the FBI, and the IRS.

“Protecting members against corruption perpetrated by their union leaders is critical to the mission of the U.S. Department of Labor’s Office of Labor Management Standards” said OLMS Director Thomas Murray, in the Detroit-Milwaukee District office. “These convictions leave no question as to the agency’s commitment to seek justice when anyone abuses their union position for personal financial gain. We place a high priority on combatting financial malfeasance and safeguarding financial integrity in labor unions.”

Brown - former director for employee relations at Fiat Chrysler from 2009 to 2016 - pleaded guilty to one count of misprision of a felony, and the court sentenced him to 12 months of imprisonment and a $10,000 fine. Brown admitted that he knew FCA executives committed a felony when they authorized and made prohibited payments and provided things of value to UAW officers and employees; that he failed to notify the authorities of the criminal activities as soon as possible and deliberately took actions to conceal the crime by misleading a federal grand jury.

Durden - formerly employed in FCA’s corporate accounting department and the one-time controller of the UAW-Chrysler National Training Center (NTC) - pleaded guilty to one count of conspiracy to defraud the U.S. and one count of failure to file a tax return. The court sentenced Durden to 15 months of imprisonment and restitution of $8,811.16. Between 2009 and 2015, Durden conspired with other defendants to use two tax-exempt organizations – NTC and the Leave the Light on Foundation – to direct millions of dollars in illegal payments to senior UAW officials.

Mickens - the third highest union official in the UAW’s Chrysler Department - pleaded guilty to conspiracy to violate the LMRA by knowingly accepting payments, money and things of value from persons acting in the interest of FCA and facilitating over $700,000 in illegal payments from Fiat Chrysler to other senior UAW officials. The court sentenced him to 12 months of imprisonment and a $10,000 fine.

Brown, Durden, and Mickens are the latest defendants sentenced in the ongoing criminal investigation into illegal payoffs to UAW officials. Two more defendants – Virdell King and Nancy Johnson, both UAW officials - have pleaded guilty and will be sentenced on November 13 and November 19, 2018, respectively.

In August 2018, the court sentenced Alphons Iacobelli - former FCA vice president - to 66 months in prison and 2 years of supervised release based on the conspiracy to pay over $1.5 million in illegal payments to UAW officials and to evade taxes, and ordered him to pay $853,522 in restitution for the tax charge, a $10,000 fine, and a $100 special assessment.

In July 2018, the court sentenced Monica Morgan - wife of deceased General Holiefield, former Vice President of the UAW in command of the Chrysler Department - to 18 months in prison and ordered her to pay $190,747 in restitution for tax fraud in connection with the receipt of illegal payments by her husband.

Additional information can be found at https://www.dol.gov/olms.