FCA-UAW suspects funneled cash through charity, authorities say
Authorities: Suspects funneled cash through a hospice and a charity
In a scheme to get rich, some Fiat Chrysler Automobiles executives and United Auto Workers union leaders funneled money through a children’s charity and laundered funds through a hospice that wasn’t providing services, federal authorities allege in a new court filing.
The government is seeking to keep $292,000 seized from two bank accounts tied to the Hospice of Metropolitan Detroit.
The government claims the money was part of a money-laundering scheme involving UAW and Fiat Chrysler executives, some of which was secretly funneled to Monica Morgan, the indicted wife of a late UAW vice president.
FBI agents seized $292,000 in February from two bank accounts as part of a corruption investigation that is looking into allegations that Fiat Chrysler executives and union officials schemed to line their own pockets, court papers show. They did this, the government claims, by stealing $4.1 million in Fiat Chrysler worker-training funds to buy trips, designer clothes, a Ferrari, a shotgun and two $37,500 Montblanc pens.
The government says it worked like this:
Executives stole money from the training center, then funneled it to themselves through various organizations, including a children’s charity called the Leave the Light On Foundation and the Hospice of Metropolitan Detroit.
It was a $325,000 check to the hospice center that raised red flags for the FBI.
It was written in 2014 from the Leave the Light On Foundation to the hospice center, which was allegedly operated by one of Morgan’s associates, Mary Eloni Wilks.
Wilks knew that Morgan and husband General Holifield, the late UAW vice president, were involved in the children’s charity, according to federal records. Within months of receiving the $325,000 check from that charity, the government alleges, Wilks started funneling money to Morgan.
“Wilks acknowledged making transfers of up to $1,500 to Monica Morgan in the months after HMD received $325,000 from LTLOF,” prosecutors wrote in the filing.
Wilks has not been charged in the case. She could not be reached for comment. No one answered the telephone at the Detroit hospice center on Grand River Avenue when a reporter called.
One of the hospice center’s former board members, Tesfeye Kebede, told federal agents that the hospice didn’t really help anyone,
It was a $325,000 check to the Hospice of Metropolitan Detroit that raised red flags for the FBI.
court documents say. And he had no idea that the center had received a $325,000 check from a children’s charity.
“Kebede stated that HMD was formed to operate as a typical hospice, but never provided any hospice-related services,” prosecutors wrote in the complaint. “Kebede stated that ... his involvement was limited because HMD was not performing any work.”
Kebede could not be reached for comment. He resigned from the hospice board last year.
So far, four individuals have been charged. Besides Morgan, they include:
Former Fiat Chrysler Vice President Alphons Iacobelli, who is accused of steering $1.2 million in employee-training funds to Morgan, Holiefield and others. Iacobelli also is accused of pocketing $1 million in training funds.
Morgan, whose photo business allegedly once received $70,000 from a charity that was supposed to help children struggling with hardships. The government claims the charity was really a sham set up by Holiefield and Iacobelli.
Virdell King, 65, of Detroit, a former union chapter president. She is accused of buying designer shoes, clothing, jewelry and luggage using credit cards that were issued through the UAW-Chrys- ler National Training Center. King also is accused of making more than $40,000 in additional purchases that pampered other senior UAW officials, including a shotgun, golf equipment, luggage, concert tickets, theme park tickets and other items.
Jerome Durden of Rochester, Mich., a financial analyst at Fiat Chrysler who allegedly helped conceal the fraud. He pleaded guilty to his role in the scheme and faces up to five years in prison.
UAW spokesman Brian Rothenberg was not immediately available for comment but has emphasized that the UAW continues to cooperate with the investigation.
UAW and Fiat Chrysler officials have said that no labor contracts were affected by the alleged scandal.