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Dennis Williams, Former U.A.W. Leader, Is Accused of Conspiracy

Federal prosecutors on Thursday charged a former president of the United Auto Workers union, Dennis Williams, with conspiring to embezzle union funds for personal expenses and luxury travel. He is the 15th person accused in a broad investigation into corruption at the union.

Mr. Williams, 67, the U.A.W. president from 2014 to 2018, used union money to pay for private villas in Palm Springs, Calif., expensive cigars, golfing apparel, green fees at golf courses and lavish dinners, according to documents filed by prosecutors in federal court in Detroit.

The Justice Department contends that Mr. Williams conspired with his successor, Gary Jones, who pleaded guilty to similar charges in June, and several other senior U.A.W. officials.

“The charges today are further steps forward in our relentless effort to ensure that the over 400,000 men and women of the U.A.W. have honest and ethical leadership,” Matthew J. Schneider, the U.S. attorney for the Eastern District of Michigan, said in a statement. “The U.A.W.’s members deserve leaders dedicated to serving the members and their families, not serving themselves.”

The investigation of the U.A.W. dates back to at least 2015 and has resulted in guilty pleas from at least 11 union officials and three former executives of Fiat Chrysler.

Under a cooperation agreement reached with federal prosecutors, Mr. Jones acknowledged using more than $1 million in union funds for vacation rentals, golf outings, clothing, liquor and expensive meals. According to prosecutors, Mr. Jones spent some $60,000 just on cigars and smoking paraphernalia.

The plea agreement indicated that a U.A.W. officer, whom court filings refer to as Official B, had urged using union money in ways that would benefit himself and other officials. Union officials have previously confirmed that Official B is Mr. Williams.

This is a developing story. Check back for updates.

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Former U.A.W. President Gary Jones Pleads Guilty

The former president of the United Auto Workers Union, Gary Jones, on Wednesday pleaded guilty to embezzling union funds, becoming the highest-ranking union official to admit wrongdoing in a wide-ranging federal investigation that has involved more than a dozen senior union officials and at least three executives from Fiat Chrysler.

Under a cooperation agreement reached with federal prosecutors, Mr. Jones, 63, acknowledged using more than $1 million in union funds for vacation rentals, golf outings, clothing, liquor and expensive meals. According to prosecutors, Mr. Jones spent some $60,000 just on cigars and smoking paraphernalia.

In hearing held via Zoom before the U.S. District Court for the Eastern District of Michigan, Mr. Jones admitted filing expense reports to the U.A.W. that concealed his use of union funds.

“While some of these expenditures related to union activities, others were personal in nature and did not relate to union business,” he said. “I recognize that my actions violated the law as well as my sworn obligation to my fellow union members.”

In a statement, the current U.A.W. president, Rory Gamble, said Mr. Jones and other union officials violated the trust of the union’s members. “Their actions were selfish, immoral, and against everything we stand for as a union,” he said.

As part of the plea agreement with prosecutors, Mr. Jones has agreed to cooperate in the investigation, and forfeit more than $140,000 in cash obtained illegally. He is scheduled to be sentenced Oct. 3. Federal guidelines call for a prison sentence of 47 to 56 months.

The U.S. attorney’s office in Detroit has agreed to seek a lesser sentence if Mr. Jones cooperates fully, said David Gardey, chief of the office’s public corruption unit.

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The investigation has uncovered several loosely related schemes carried out by different union and corporate officials. In one case, a union vice president who once held a seat on the board of General Motors received kickbacks from the purchase of U.A.W. branded watches. In another, Fiat Chrysler’s top labor negotiator pleaded guilty to using union funds to buy a Ferrari and renovate his 6,800-square-foot home.

Details revealed in the investigation also led G.M. to file a lawsuit in November that accuses Fiat Chrysler of bribing union officials to get a leg up on G.M. in labor contracts. Fiat Chrysler has said the lawsuit is without merit.

The federal investigation into the U.A.W. began more than five years ago and is still active. Among those still under scrutiny is Mr. Jones’s predecessor, Dennis Williams. A plea agreement in February with a former aide to Mr. Jones indicated that a U.A.W. officer, whom court filings refer to as Official B, had urged using union money in ways that would benefit himself and other officials. Union officials have confirmed that Official B is Mr. Williams. The union also built a luxurious lakeside cabin for Mr. Williams at a U.A.W. resort about 250 miles north of Detroit.

A lawyer for Mr. Williams did not respond to requests for comment.

The U.S. attorney in Detroit, Matthew Schneider, has previously said that he could not rule out a federal takeover of the U.A.W. Another union that was the subject of a corruption investigation, the International Brotherhood of Teamsters, regained its independence in February after 30 years of federal oversight.

The investigation has dealt a big blow to the U.A.W. Mr. Gamble has apologized for its failings and has pledged to reform it. While the union no longer has the power and political influence it wielded decades ago, it remains one of the largest labor groups in the country and is a key player in the U.S. auto industry. The U.A.W. represents about 400,000 workers and is the biggest union at G.M., Ford Motor and Fiat Chrysler.

Mr. Jones pleaded guilty to two counts: for improperly using union funds and tax fraud for not reporting and paying taxes on that illicit income.

His plea agreement is the first time in decades that a union president of national stature has faced such serious criminal charges, said an expert on union corruption, David Witwer of Pennsylvania State University at Harrisburg. Professor Witwer pointed to the 1981 indictment of Roy L. Williams, president of the International Brotherhood of Teamsters at the time, on charges that he had conspired to bribe a senator in hopes of blocking or delaying a trucking deregulation measure.

Three years earlier, Joseph P. Tonelli, at the time the president of the United Paperworkers International Union and a top official with the A.F.L.-C.I.O., was charged along with other union officials for embezzling $360,000 from the union. Both leaders were later convicted.

The plea agreement marks a dramatic fall for Mr. Jones, who joined the U.A.W. as a welder and was elected president in 2018. Last year, he led workers through a 40-day strike against G.M. The strike yielded increased pay and benefits for temporary workers and those with less seniority, a key union goal. In exchange, the union accepted G.M.’s decision to close a plant in Lordstown, Ohio, a move that frustrated some U.A.W. members.

Mr. Jones took a leave of absence a week after that strike ended and resigned a few weeks later as the union moved to oust him.

Noam Scheiber contributed reporting.

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U.A.W. Corruption Case Widens as Former Chief Is Charged

A former president of the United Auto Workers has been charged with embezzlement of union funds and other crimes, the biggest step yet in a broad investigation of financial wrongdoing that the prosecutor said could justify a federal takeover of the union.

In a criminal filing unsealed Thursday, the former official, Gary Jones, is accused of conspiring in the misuse of more than $1 million of union money for extravagant meals, golf outings, cigars and apparel over several years, even before he was elected president in 2018.

He is the highest-ranking U.A.W. official to be prosecuted in the inquiry, in which more than a dozen people have been charged. Among them are three former Fiat Chrysler executives, including the company’s chief negotiator with the union.

Mr. Jones resigned as U.A.W. president on Nov. 20 after the union’s executive board found he had submitted false and misleading expense records and took steps to oust him. His home in Canton, Mich., had been raided in August by agents from the Federal Bureau of Investigation.

The union distanced itself from Mr. Jones and denounced the activity attributed to him. “This is a violation of trust, a violation of the sacred management of union dues, and goes against everything we believe in as a union,” it said in a statement Thursday. It declared that the union was “continuing to implement the critical reforms necessary to ensure our union is free from the type of corrosive corruption we have witnessed from those who betrayed our trust.”

But at a news conference in Detroit, the U.S. attorney overseeing the investigation, Matthew Schneider, said he could not rule out a federal takeover of the union. The government resorted to such measures for over 25 years to root out corruption within the International Brotherhood of Teamsters.

Mr. Schneider alluded to comments by James P. Hoffa, the union’s president, indicating that government oversight had made the union more democratic. Oversight could be a “good model here,” Mr. Schneider said, before adding that it was premature to elaborate.

He said his office had had “productive discussions” with Mr. Jones’s lawyer but that it remained to be seen whether or not Mr. Jones would plead guilty. A guilty plea could lead to cooperation with prosecutors seeking to bring further charges in the case. Mr. Schneider said he would have to “wait and see” when asked if he expected such cooperation.

The U.S. attorney’s office said that on each of the two counts in the indictment, Mr. Jones faced a maximum of five years in prison and a fine of up to $250,000.

Bruce Maffeo, a lawyer for Mr. Jones, declined to comment.

Last fall, Mr. Jones guided the union through a 40-day strike against General Motors that ended with substantial pay increases, promises of large investments in plants in the United States and a process for temporary workers to become permanent employees.

The federal investigation began in 2015 and has focused on the misuse of millions of dollars of U.A.W. funds in various ways. Three former Fiat Chrysler executives have been sentenced on charges that they allowed U.A.W. officials to divert money from worker training to personal travel and shopping. One of those executives was found to have used training funds to buy a Ferrari and renovate his home.

The allegations have also prompted a lawsuit by General Motors accusing Fiat Chrysler of bribing union officials to get a leg up on G.M. in contract negotiations.

Mr. Schneider, the prosecutor, said Thursday that there was an “ongoing investigation touching on all the auto companies” and that investigators were “still receiving tips from U.A.W. members.”

Mr. Jones’s predecessor as union president, Dennis Williams, has also been a focus of the investigation. A plea agreement in February with a onetime deputy to Mr. Jones indicated that Mr. Williams had urged the use of union money to benefit himself and other officials.

Another senior union official, Joe Ashton, who once held a seat on G.M.’s board, has been charged with taking kickbacks from companies that supplied the union with commemorative watches.

Before becoming U.A.W. president, Mr. Jones headed a regional office spanning 17 states and organized union conferences in Palm Springs, Calif. Prosecutors contend in court filings that he and other officials spent more than $1 million in union money for extended stays in luxury villas, lavish dinners and expensive clothing, cigars and golf clubs.

In the charges filed against Mr. Jones, prosecutors focused both on his role in diverting union funds for these purposes and on what they contend is tax fraud that resulted from the embezzlement conspiracy. They write that the union failed to report income it paid to officials like Mr. Jones in its tax filings because the outlays were concealed as legitimate expenses, and that Mr. Jones failed to report income he received on his own tax returns.

For example, the filing says that in 2017, Mr. Jones and his accused co-conspirators orchestrated the transfer of more than $500,000 in union funds to four resorts throughout the country, but that more than $290,000 of those funds were diverted to illegitimate uses like meals and cigars. It says that this caused a U.A.W. accounting official to unknowingly file a false tax form with the Internal Revenue Service because the form did not list the $290,000 as reportable income to the union’s officers.

On the day Mr. Jones’s home was raided, federal agents also searched other locations, including the union’s 1,000-acre retreat, known as Black Lake, in Onaway, Mich.; the Hazelwood, Mo., office of U.A.W. Region 5, which Mr. Jones once led; and Mr. Williams’s home in Corona, Calif.

Among the sites searched at the Michigan retreat was a lakeside cabin being built for the exclusive use of Mr. Williams, who led the union from 2014 to 2018.

Mr. Williams, who joined the union as a welder, later served as a regional leader and secretary-treasurer. When the charges involving the misuse of training funds to benefit Fiat Chrysler and U.A.W. officials emerged in 2017, he said the union “had absolutely no knowledge of the fraudulent activities detailed in this indictment until they were brought to our attention by the government.”

As the case widened this year, an associate of Mr. Jones’s in Region 5, Edward N. Robinson, was charged on Oct. 31 with drawing more than $1.5 million from union accounts over several years and sharing the money with a person prosecutors identified only as “U.A.W. Official A.”

Two days later, the U.A.W. board convened and announced that Mr. Jones would take a paid leave. Rory Gamble, a union vice president who led the bargaining with Ford, was named interim president.

Union officials have confirmed that references in court filings to “Official A” and “Official B” referred to Mr. Jones and Mr. Williams.

Another union official, Vance Pearson, was charged in September with embezzlement, money laundering, wire fraud, conspiracy and other offenses. Mr. Pearson, who led the Region 5 office after serving as Mr. Jones’s lieutenant there, resigned on Nov. 24 as the union’s board took steps to remove him. He pleaded guilty on Feb. 7 after agreeing to cooperate with prosecutors in the investigation and awaits sentencing.

The plea agreement stated that a request by Mr. Williams, Mr. Jones’s predecessor, was “to a great extent” behind an order for more than $13,000 worth of cigars and cigar paraphernalia in 2016. The agreement also said that Mr. Williams had directed Mr. Pearson to procure a private villa for him in California for months at a time, and that Mr. Pearson also helped arrange for Mr. Williams’s wife to charge expenses to the union through a resort.

At the time of Mr. Pearson’s plea, a lawyer for Mr. Williams did not respond to a request for comment.

The federal investigation is also looking into other unidentified union officials, according to court filings.

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Former U.A.W. Chief Charged With Misusing Union Funds

Federal prosecutors have charged a former president of the United Auto Workers union with embezzlement of union funds and other crimes, the biggest step yet in a broad investigation of financial wrongdoing by union and management officials.

In a criminal filing unsealed Thursday, the former official, Gary Jones, is accused of misusing more than $1 million of union money, for extravagant meals, golf outings, cigars and apparel over several years even before he was elected president in 2018.

He is the highest-ranking U.A.W. official charged in the inquiry. In August, his home in Canton, Mich., was raided by agents from the Federal Bureau of Investigation. He resigned Nov. 20 after the union’s executive board found he had submitted false and misleading expense records and was moving to oust him.

Last fall, Mr. Jones guided the union through a 40-day strike against General Motors that ended with substantial pay increases, promises of large investments in plants in the United States and a process for temporary workers to become permanent employees.

More than a dozen people have been charged in the investigation, which began in 2015 and has focused on misuse of millions of dollars of U.A.W. funds in various ways. Three former Fiat Chrysler executives have been sentenced on charges that they allowed U.A.W. officials to divert money from worker training to personal travel and shopping. One of the Fiat Chrysler executives was found to have used training funds to buy a Ferrari sports car and renovate his home.

The allegations have also prompted a lawsuit by General Motors accusing Fiat Chrysler of bribing union officials to get a leg up on G.M. in contract negotiations.

Mr. Jones’s predecessor as union president, Dennis Williams, has also been a focus of the investigation. A plea agreement in February with a onetime deputy to Mr. Jones indicated that Mr. Williams had urged the use of union money to benefit himself and other officials.

Another senior union official, Joe Ashton, who once held a seat on G.M.’s board, has been charged with taking kickbacks from companies that supplied the union with commemorative watches.

Before becoming U.A.W. president, Mr. Jones headed a regional office spanning 17 states and organized union conferences in Palm Springs, Calif. Prosecutors contend in court filings that he and other officials spent more than $1 million in union money for extended stays in luxury villas, lavish dinners, and expensive clothing, cigars and golf clubs.

In the charges filed against Mr. Jones, prosecutors focused both on his role in diverting union funds for these purposes and on what they contend is tax fraud that resulted from the embezzlement conspiracy. They write that the union failed to report income it paid to officials like Mr. Jones in its tax filings because the outlays were concealed as legitimate expenses, and that Mr. Jones failed to report income he received on his own tax returns.

For example, the filing says that in 2017, Mr. Jones and his accused co-conspirators orchestrated the transfer of more than $500,000 in union funds to four resorts throughout the country, but that more than $290,000 of those funds were diverted to illegitimate uses like meals and cigars. It says that this caused a U.A.W. accounting official to unknowingly file a false tax form with the Internal Revenue Service because the form did not list the $290,000 as reportable income to the union’s officers.

On the day Mr. Jones’s home was raided, federal agents also searched other locations, including the union’s 1,000-acre retreat, known as Black Lake, in Onaway, Mich.; the Hazelwood, Mo., office of U.A.W. Region 5, which Mr. Jones once led; and Mr. Williams’s home in Corona, Calif.

Among the sites searched at the Michigan retreat was a lakeside cabin being built for the exclusive use of Mr. Williams, who led the union from 2014 to 2018.

Mr. Williams, who joined the union as a welder, later served as a regional leader and secretary-treasurer. When the charges involving the misuse of training funds to benefit Fiat Chrysler and U.A.W. officials emerged in 2017, he said the union “had absolutely no knowledge of the fraudulent activities detailed in this indictment until they were brought to our attention by the government.”

As the case widened this year, an associate of Mr. Jones’s in Region 5, Edward N. Robinson, was charged on Oct. 31 with drawing more than $1.5 million from union accounts over several years and sharing the money with a person prosecutors identified only as “U.A.W. Official A.”

Two days later, the U.A.W. board convened and announced that Mr. Jones would take a paid leave. Rory Gamble, a union vice president who led the bargaining with Ford, was named interim president.

Union officials have confirmed that references in court filings to “Official A” and “Official B” referred to Mr. Jones and Mr. Williams.

Another union official, Vance Pearson, was charged in September with embezzlement, money laundering, wire fraud, conspiracy and other offenses. Mr. Pearson, who led the Region 5 office after serving as Mr. Jones’s lieutenant there, resigned on Nov. 24 as the union’s board took steps to remove him. He pleaded guilty on Feb. 7 after agreeing to cooperate with prosecutors in the investigation and awaits sentencing.

The plea agreement stated that a request by Mr. Williams, Mr. Jones’s predecessor, was “to a great extent” behind an order for over $13,000 worth of cigars and cigar paraphernalia in 2016. The agreement also said that Mr. Williams had directed Mr. Pearson to procure a private villa for him in California for months at a time, and that Mr. Pearson also helped arrange for Mr. Williams’s wife to charge expenses to the union through a resort.

At the time of Mr. Pearson’s plea, a lawyer for Mr. Williams did not respond to a request for comment. On Thursday, Bruce Maffeo, a lawyer for Mr. Jones, declined to comment on the new charges.

The federal investigation is also looking into other unidentified union officials, according to court filings.

In an interview with The Detroit News in December, Matthew Schneider, the U.S. attorney overseeing the case, suggested that federal oversight of the union was a possibility. The government famously resorted to such measures for over 25 years to root out corruption within the International Brotherhood of Teamsters.

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Former U.A.W. Official Pleads Guilty in Corruption Scandal

A former top official of the United Automobile Workers union pleaded guilty Friday to conspiring with fellow officials in a scheme that siphoned hundreds of thousands of dollars in members’ dues to support spending on villa rentals, lavish meals, golf clubs and golf outings.

The official, Vance Pearson, a former head of the U.A.W.’s vast Region 5, which runs from Missouri to the West Coast, could face up to five years in prison and $250,000 in fines.

Mr. Pearson was the one-time deputy to former U.A.W. president Gary Jones, who has not been charged but is portrayed in documents filed by prosecutors as one of the orchestrators of the embezzlement scheme. Mr. Jones resigned as U.A.W. president last year.

“Today’s guilty plea is one more leap forward in our drive to prosecute corruption at the highest levels of the United Auto Workers union,” said Matthew Schneider, the United States attorney leading the investigation.

Scott Rosenblum, a lawyer for Mr. Pearson, said by phone that his client had “accepted responsibility and plans to move forward.” He added by email that “it is an unfortunate chapter in what has otherwise been an exemplary and productive life.”

This is a developing story. Check back for updates.