DETROIT (Reuters) - The widow of a United Auto Workers union official at the center of a U.S. probe into improper payments funneled out of Fiat Chrysler Automobiles NV (FCA) pleaded guilty on Tuesday to tax fraud.
As part of a 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 faces a prison sentence of up to 27 months and a maximum fine of $100,000. She must also pay the federal government around $190,000 in restitution.
The most serious charges against her, including conspiracy and fraud related to an ongoing investigation by the U.S. Justice Department into alleged misspending at UAW union training centers, were dropped.
Last month Alphons Iacobelli, 58, who was a vice president of employee relations at Fiat Chrysler, pleaded guilty to making at least $1.5 million in improper payments to UAW officials.
Under Iacobelli’s separate plea agreement, he 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.
Iacobelli used funds from the Italo-American automaker to pay out more than $1.5 million in cash and items of value to UAW officials and employees, according to the plea agreement, which has weighed on the leadership of the once-powerful union.
The purpose of the payments and gifts was to obtain concessions from the UAW in collective bargaining agreements between the automaker and the union, the plea agreement said.
In a letter to union members last month, UAW President Dennis Williams said claims that payments to Holiefield had compromised contract talks or impacted union funds were baseless.
But in a statement Tuesday, the UAW said it had taken steps to prevent any similar cases, including stringent new procedures for awarding vendor contacts.
Outside the courtroom in Detroit on Tuesday, Morgan’s attorney Steven Fishman said it was “unfair” for his client to be included in the broader bribery case “when it was clear she had nothing to do with it.”
Morgan will be sentenced at U.S. District Court for the Eastern District of Michigan on June 4.
Reporting by Nick Carey; Editing by Tom Brown