DETROIT (Reuters) – The widow of a United Auto Workers union official at the center of an expanding U.S. probe into improper payments funneled out of Fiat Chrysler Automobiles NV (FCA) was sentenced to 18 months in jail on Friday for tax fraud.
As part of an earlier plea agreement, Monica Morgan, 54, admitted to filing a fraudulent tax return for 2011 that intentionally omitted around $200,000 in income received from charities associated with her husband, former UAW Vice President General Holiefield, who died in March 2015.
Under the plea deal, Morgan has also agreed to pay the federal government around $190,000 in restitution. She must serve 12 months probation after her release from detention.
The most serious charges against her, including conspiracy and fraud related to an ongoing investigation into alleged misspending at UAW union training centers, were dropped.
Earlier this year, Alphons Iacobelli, 58, a former vice president of employee relations at FCA, pleaded guilty to making at least $1.5 million in improper payments to UAW officials.
Under his plea agreement, Iacobelli admitted to making hundreds of thousands of dollars in prohibited payments to charities controlled by UAW officials.
The agreement also said Iacobelli had authorized paying off Morgan and Holiefield’s $262,000 mortgage.
During sentencing U.S. District Judge Paul Borman said Morgan knew the income she failed to report had come from illegal activity and so a custodial prison sentence was necessary.
“This is a serious offense and not just a failure to pay taxes,” Borman said.
Last month, federal prosecutors alleged in a court document that top officials at FCA and the UAW conspired to violate U.S. labor laws, saying a former executive at the automaker knew bribes paid to union leaders were designed to “grease the skids” in labor negotiations. [nL1N1TF0KZ]
The UAW’s leadership has repeatedly stated that any illegal activity was limited to just a few people and had no impact on the union’s negotiations with automakers.
“The misconduct by certain individuals in this case has been disturbing,” the union said in a statement on Friday. “Importantly, however, the wrongdoing did not involve union funds or affect our collective bargaining agreements.”
FCA Chief Executive Officer Sergio Marchionne has said in the past the misconduct had “had nothing whatsoever to do with the collective bargaining process” and the “egregious acts were neither known to nor sanctioned” by the company.
Reporting by Nick Carey; Editing by Tom Brown