DETROIT -- Former Fiat Chrysler Automobiles labor relations chief Alphons Iacobelli was sentenced Monday to 66 months in federal prison for tax evasion and his role in a wide-ranging conspiracy to win favorable treatment from the UAW for FCA.
He is the highest-ranking person to have worked at the automaker convicted in the scandal to date.
Iacobelli in January pleaded guilty to federal charges of conspiring to violate the Labor Management Relations Act and for subscribing a false tax return. He had faced a statutory maximum of eight years in prison.
He also faces tax restitution of $835,000. A hearing on that restitution will held at a future date.
Appearing in U.S. District Court before Judge Paul Borman on Monday morning, Iacobelli, dressed in a blue suit, took responsibility for his crimes and promised to continue to cooperate with the government in its ongoing investigation of the broader conspiracy.
"I have directed all of my energies to that goal for the last few years," Iacobelli said. Indeed, because of his cooperation, the government asked the court before sentencing to reduce his requested sentence from 96 to 76 months.
A 14-page memorandum of sentencing for Iacobelli released last week stated: "FCA sought to obtain benefits, concessions and advantages in the negotiation and administration of collective bargaining agreements with the UAW in an effort to buy labor peace. High-level officials of the UAW sought to enrich themselves and live lavish lifestyles rather than zealously work on behalf of the best interests of tens of thousands of rank and file members of their union."
The memo also noted that, for certain aspects of FCA's negotiations and relationship with the UAW, Iacobelli reported directly to the automaker's late CEO, Sergio Marchionne -- though it doesn't mention Marchionne by name.
Others who have been charged in the ongoing are former FCA financial analyst Jerome Durden; former FCA employee Michael Brown; ex-UAW Associate Director Virdell King; UAW official Keith Mickens; and Nancy Johnson, a former top aide to ex-UAW Vice President Norwood Jewell, who was charged with misusing funds but has not yet been arraigned. Jewell has been implicated in the scandal but not formally named as a conspirator by investigators.
Morgan, Iacobelli and Durden are also being sued by the UAW-Chrysler National Training Center to recover more than $4.4 million in damages.
In court Monday, Iacobelli's attorney, David DuMouchel, argued that his client "was a big part of the problem," with a compromised labor management relationship between FCA and the UAW, "but he wasn't the problem." DuMouchel said there had been "an ongoing conspiracy" which his client had "knowingly joined." He said Iacobelli -- whom he said would be "virtually unemployable" and financially ruined when he is released from prison -- "has to face the fact that he brought this on himself."
In court, prosecutors said that Iacobelli has helped in their investigation of "other targets" in the conspiracy beyond those already charged, though they did not identify them. They said the scheme to pay millions from FCA "and its corporate predecessors" to the UAW and its officials to "buy labor peace" had begun before 2009 and did not end in 2015, and likened the case to public corruption, where UAW members were the victims.
In a statement after the sentencing, the UAW said: “We are appalled by the conduct of Mr. Iacobelli in his capacity as the co-head of the National Training Center (NTC) to defraud and steal from the NTC. As he has admitted, Mr. Iacobelli stole hundreds of thousands of dollars of NTC monies to build a luxury swimming pool and outdoor kitchen at his house for himself. He stole NTC monies to buy a $350,000 Ferrari for himself. He stole NTC monies to buy jewel-encrusted pens for $37,000 a piece for himself. And he stole NTC monies to pay over $1 million in personal credit card bills for himself and his wife. Whatever may be said about the misconduct of others at the NTC, these thefts from the NTC by Al Iacobelli had nothing to do with trying to influence collective bargaining. They had everything to do with Al Iacobelli’ s personal greed. And the NTC has now sued Mr. Iacobelli to recover the millions of dollars he stole from it.
"There are many layers of checks and balances in our contract negotiations and ratification, including membership voting, and we are confident the terms of our UAW contracts were not impacted by Iacobelli’ s fraudulent conduct at the NTC. The UAW has and continues to respond by making changes to ensure this type criminal behavior will not happen again.”