U.S. charges retired UAW official in ongoing corruption probe
Virdell King, a retired UAW official, was charged with using a credit card from a training center for Chrysler employees to buy more than $40,000 worth of personal items.
Automotive News | August 18, 2017 – 12:06 pm EST
DETROIT — A well-known official of the UAW has become the fourth person charged in connection with a $4.5 million embezzlement case involving the union and Fiat Chrysler Automobiles.
Virdell King, a retired UAW associate director, was charged in a 17-page document with using a credit card from a training center for Chrysler employees to buy more than $40,000 worth of clothing, jewelry, luggage and other personal items for herself and other senior UAW officials.
King, 65, who is known the first African-American female to be elected president of a local union in UAW-Chrysler’s history, was charged in U.S. District Court on Friday in the information document, indicating that she is likely cooperating and working on a plea deal with the government.
A lawyer for King, John Shea, declined to comment Friday.
“We are disheartened by the misconduct alleged in today’s indictment,” UAW President Dennis Williams said in a statement on Friday. “Ms. King is no longer with the union and hasn’t been since February 2016. Based on our own internal investigation, we believe anyone who engaged in intentional misconduct is no longer employed by the UAW. We continue to cooperate with the DOJ (Department of Justice) and share information with the government.”
Among the purchases for herself was a pair of Christian Louboutin shoes for more than $1,000, authorities said. Another was a $2,180 shotgun, was gifted to UAW Vice President Norwood Jewell by King in 2015 for his birthday. After discovering the firearm was gifted using stolen funds, Jewell reimbursed the union for the cost. Jewell has not been publicly named as part of the investigation at this time.
“We have thoroughly investigated the matter and concluded that Norwood Jewell did nothing illegal and has acted in line with the UAW’s ethical practices,” the UAW said in a separate statement.
The financial trail of Jewell’s top administrative assistant, Nancy Johnson, is also under federal investigation, The Detroit News reported. Allegedly, her training center credit card was also used to buy luxury designer goods, the newspaper reported.
FCA executives partnered with UAW leaders to siphon funds earmarked for employee training for personal use, a federal indictment alleged. The 42-page document outlines a $2.2 million dollar conspiracy, charging UAW and FCA officials embezzled funds for lavish gifts and home renovation. That amount rose to $4.5 million in stolen funds, according to a plea deal for a third official charged in the conspiracy.
The case has led to criminal charges against three others: former Fiat Chrysler executive Alphons Iacobelli, former FCA financial analyst Jerome Durden and Monica Morgan, the wife of Jewell’s predecessor, General Holiefield.
The head of the Detroit FBI, David Gelios, said “years of fraud and corruption within a select group of the FCA and UAW hierarchy continue to be eroded through the diligence and collaboration of law enforcement.”
FCA CEO Sergio Marchionne said last month the “deplorable” conduct “had nothing whatsoever to do with the collective bargaining process.” The company also said in July that the “egregious acts were neither known to nor sanctioned by (Fiat Chrysler),” and declined to elaborate on Friday.
The document released Friday outlines how credit cards tied to the training center funds were distributed to UAW executives. In December 2012, Holiefield allegedly told King that Iacobelli did not have a problem with them using their NTC credit cards to purchase personal items “if we see something we want.”
In February 2012, Durden directed that payments to credit cards were to be “screened” from the members of the NTC accounting staff, and changed the security settings of the center’s accounting software to further conceal payments, according to the document.
Both Iacobelli and Holiefield’s widow each had a not guilty plea entered on their behalf. Durden pleaded guilty as part of a plea deal for his involvement in funneling the money to the Chrysler training center.
A jury trial for Iacobelli and Morgan is scheduled to begin Sept. 25 in Ann Arbor, Mich.
The probe likely will levy more charges against FCA employees and other high-ranking UAW officials who may have been involved.
Following the indictment, the UAW and FCA said they had worked together with the training center to safeguard against future liability. There is now a ban on any charitable donations from the center to a charity run or controlled by a UAW official. There are also new policies and processes in place for vendor and credit cards. Additionally, budgets must be approved by training center board members or directors, and the center has a full-time controller.
A hotline was also created for members to report suspected wrongdoing.
Reuters contributed to this report.