Former Fiat Chrysler Automobiles executive Alphons Iacobelli pleaded guilty on Monday in connection to allegations that he made at least $1.5 million in improper payments to senior union officials, the U.S. attorney's office in Detroit said.
Iacobelli, 58, a former Fiat Chrysler vice president of employee relations, was charged in July in U.S. District Court in Detroit with taking part in a conspiracy to pay prohibited money and gifts to United Auto Workers union officials.
Sentencing was set for May 29. Iacobelli faces a statutory maximum of eight years in prison, and prosecutors said he will be required to repay $835,000.
A lawyer for Iacobelli did not immediately comment on Monday.
Iacobelli pleaded guilty to conspiracy to violate the Labor Management Relations Act and to filing a false tax return based on his failure to report hundreds of thousands of dollars in income that he illegally diverted, the government said.
Iacobelli reportedly made some lavish purchases with money taken from the UAW-Chrysler National Training Center — a 2013 Ferrari 458 Spider and two solid-gold Mont Blanc pens costing $37,500 apiece. He reportedly sold the sports car at a discount when news broke of the investigation.
The government said Iacobelli conspired to make illegal payments in an effort to obtain concessions and advantages for Fiat Chrysler "in the negotiation, implementation and administration of the collective bargaining agreements between FCA and the UAW."
Monica Morgan, the wife of former UAW Vice President General Holiefield, who died in March 2015, is also expected to plead guilty, Reuters reported last week, citing a person briefed on the matter. She faces a plea hearing on Feb. 6.
Morgan was charged with conspiring with Iacobelli to violate federal labor law. Morgan's lawyer, Steve Fishman, declined comment.
Jerome Durden, a former Fiat Chrysler official whom the government charged with conspiring to divert over $4.5 million in UAW training center funds, pleaded guilty in August.
The Justice Department has a wide-ranging investigation under way. In November, General Motors and Ford confirmed they were cooperating with the investigation into alleged misspending at UAW union training centers funded by U.S. automakers.
It was not clear if Iacobelli is cooperating in the ongoing investigation.
General Motors is conducting an internal investigation into the matter.
The UAW said in a statement Monday that it is "appalled at these charges. We have worked with the (national training center) and Fiat Chrysler to implement a range of measures aimed at enhancing transparency and internal controls at the NTC to reduce the risk of any future recurrence of these activities."
Fiat Chrysler Chief Executive Sergio Marchionne has said the "deplorable" conduct "had nothing whatsoever to do with the collective bargaining process" and the "egregious acts were neither known to nor sanctioned by (Fiat Chrysler)."
The company had no further comment Monday.
Reporting by David Shepardson