May 14, 2020 / 6:09 PM / 2 months ago

Former UAW President Gary Jones pleads not-guilty in embezzlement case

DETROIT (Reuters) - Former United Auto Workers (UAW) President Gary Jones on Thursday pleaded not guilty to charges that he embezzled more than $1 million of union funds amid a U.S. corruption probe that has raised the specter of a federal government takeover of the union.

FILE PHOTO: United Auto Workers union President Gary Jones (R) attends the Labor Day Parade in Detroit, Michigan, U.S. September 2, 2019. Picture taken September 2, 2019. REUTERS/Rebecca Cook

Jones, of Canton, Michigan, had the plea entered by his attorney, J. Bruce Maffeo, during a brief videoconference hearing held by the U.S. District Court in Detroit. Jones was released on a $10,000 unsecured bond with the conditions that he surrender his passport and restrict travel to the continental United States.

Jones was charged in March in a criminal information, a court document typically used when the government has reached a plea deal with a defendant to plead guilty. He is scheduled to do that on June 3.

Maffeo declined to comment following Thursday’s hearing.

The union in a statement on Thursday called the actions for which Jones was charged “an unforgivable violation of his oath of office and an utter betrayal.”

Federal officials have said a takeover of the labor union remains an option.

The charging of Jones and other senior UAW leaders has shaken the union and led General Motors Co to file a racketeering lawsuit against its smaller rival, Fiat Chrysler Automobiles NV. FCA has called the lawsuit groundless.

Jones resigned his post and UAW membership in November after the union removed him from office, as U.S. prosecutors widened a criminal investigation of illegal payoffs in which at least 13 people have pleaded guilty.

Jones, a certified public accountant, was charged with conspiracy to embezzle funds from the UAW from 2010 through September 2019, and with conspiracy to defraud the United States by failing to pay taxes on the money prosecutors charge he stole. He faces a maximum of five years in prison and a fine of up to $250,000 for each count.

Jones was implicated in the corruption case in September when his former deputy was arrested on embezzlement charges.

In the scandal’s wake, the UAW announced ethics reforms and changes to its financial procedures.

Reporting by Ben Klayman in Detroit; Editing by Dan Grebler

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