(WJBK) - The feds indict a former Chrysler executive and the widow of a former union big wig. Investigators call it a multi-year conspiracy -- involving more than a million dollars.
Former UAW VP General Holiefield and Fiat Chrysler's chief negotiator Alphons Iacobelli can be seen on old video shaking hands and smiling for the camera. But FOX 2 has learned their connection ran much deeper than contract negotiations.
According to the federal indictment, they bilked Fiat Chrysler out of $1.2 million, treating the automaker's training center as their personal piggy bank from 2009 until 2014.
Jeff Gilbert is the chief automotive reporter for WWJ 950 and weighed in on the scandal.
"That money was funneled through a training center that Fiat Chrysler had set up for the UAW," Gilbert said. "And the money was supposedly used for paying off the mortgage of the UAW's vice president's house, trips, lavish gifts, a Ferrari
The Holiefields are accused of taking more than $200,000 to pay off the mortgage of their lavish Harrison Township house.
General Holiefield passed away in 2015, but his wife Monica Morgan, who neighbors say is rarely seen at the house, is now facing conspiracy charges.
And Iacobelli - Fiat Chrysler's former vice-president for employee relations - who lives in a palatial estate in Rochester, reportedly paid for everything from a new pool to a new Ferrari with the training center funds. He is also facing federal charges.
A third man, Jerome Durden, a Chrysler financial analyst, is charged with helping to cover it all up.
This payoff scandal began in 2009, right after Chrysler emerged from bankruptcy. Gilbert believes the motivation was purely money since during contract negotiations both sides agreed not to strike.
"It wasn't like the negotiator at Fiat Chrysler felt they had to do something to preventing a strike," Gilbert said. "So the motive is unknown besides possibly, just plain greed.
UAW President Dennis Williams released a statement to his membership appalled at the allegations calling it a betrayal of trust by the former vice president of the union.
Williams says the UAW has zero tolerance for corruption or wrong doing at any level.
Since being made aware of the allegations, the UAW "has cooperated fully with the Department of Justice" and "continues to share information with the public."
Although it does tarnish the UAW's solid reputation, Gilbert does not believe this will impact the integrity of the union or Fiat Chrysler moving forward.
"This is obviously something that will be a concern to them," he said. "But the fact those involved are no longer with the union,"
Fiat Chrysler also released a statement which said both the automaker and UAW were victims. The company did not know of this scheme and when it found out, the employees were terminated.