UAW Officer Faces Racketeering Charge -- WSJ
07 Janeiro 2020 - 5:02AM
Dow Jones News
By Ben Foldy and Nora Naughton
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 7, 2020).
Federal prosecutors filed a new charge against a former United
Auto Workers official Monday, alleging the defendant was involved
in an embezzlement scheme that was part of a wider racketeering
enterprise at the union.
The U.S. attorney's office in Detroit charged Vance Pearson, a
former director at UAW's regional office in Missouri, with one
count of conspiracy to embezzle union funds and to use a facility
of interstate commerce to aid a racketeering enterprise, according
to documents filed in a Michigan federal court.
The new charge is the first to specifically mention racketeering
in the yearslong investigation into corruption and embezzlement at
the union. The criminal probe has led to 11 convictions of union
officials and former executives at Fiat Chrysler Automobiles NV
since 2017. Mr. Pearson's lawyer didn't immediately return a
request for comment.
The inclusion of the racketeering language is significant and
aims to signal that investigators are considering a RICO case
against the union, a person close to the investigation told The
Wall Street Journal. The Racketeer Influenced and Corrupt
Organizations Act, known as RICO, focuses on racketeering.
Investigators allege that Mr. Pearson sent an email across state
lines to a union accounting official in June of 2016 that falsely
claimed more than $19,000 in golf expenses were for meals,
according to the charging document. Prosecutors also charge that
Mr. Pearson was involved in the illegal scheme with other
unidentified union officials and that their alleged misconduct
continued from 2010 to September last year.
Mr. Pearson was first charged in September with six counts
including embezzlement of union funds and mail and wire fraud, but
those charging documents made no mention of racketeering. At the
time, his lawyer said Mr. Pearson had planned to fight the charges.
He hasn't yet formally entered a plea.
The new charge replaced the ones previously filed.
The investigation first became public at Fiat Chrysler, where
three former employees, including a former labor-relations
executive, were convicted of involvement in stealing
worker-training center funds.
Since then, the probe has expanded to other parts of the UAW
leadership, implicating former President Gary Jones. Mr. Jones
resigned from his post and forfeited his UAW membership late last
year after the union's board moved to oust him, saying an internal
probe had found he had falsified expense reports.
Mr. Jones's attorney J. Bruce Maffeo has said the former union
leader decided to resign before learning of the UAW board's
intention to remove him from office.
The UAW's new president, Rory Gamble, has said publicly that he
plans to combat corruption through a series of reforms, including
disbanding the regional office formerly led by Mr. Pearson and Mr.
Jones.
In December, Matthew Schneider, the U.S. attorney for eastern
Michigan, said in an interview that the union has withheld evidence
and information from his office, which has been investigating
allegations of financial misconduct involving top officials.
Mr. Schneider said his office is considering various options
regarding how to proceed, including the possibility of federal
oversight of the union, an approach taken with the Teamsters in the
past to sever ties with organized crime.
The U.S. attorney's office wouldn't comment on the possibility
of additional charges in the case, a spokeswoman for the office
said Monday.
"You don't bring a racketeering charge lightly," said Peter
Henning, a law professor at Wayne State University who focuses on
corporate law and white collar crime. "That is a significant
escalation of the case," he said.
Write to Ben Foldy at Ben.Foldy@wsj.com
(END) Dow Jones Newswires
January 07, 2020 02:47 ET (07:47 GMT)
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