Who holds the victim status in the UAW training center scandal?

DETROIT — Five months after former Fiat Chrysler Automobiles labor relations chief Alphons Iacobelli was sentenced to 66 months in federal prison, his restitution remains unresolved.

The problem? Determining the victim(s).

A restitution hearing on Friday for Iacobelli lasted two hours, with arguments spewing back and forth on whether the training center was a co-conspirator used to siphon money to crooked former union officials.

The discussion escalated when Walter Piszczatowski, a lawyer representing the UAW-Chrysler National Training Center, said the organization — jointly operated by the union and automaker — is a victim rather than a co-conspirator, which federal prosecutors have labeled it.

He also said the training center's finances were diminished by Iacobelli, who pleaded guilty to tax evasion and his role in an extensive conspiracy to win favorable treatment from the UAW for FCA, when he spent about $1.5 million on luxury goods, and that the money was taken on behalf of himself and FCA.

"Although the [training center] had employees that acted unlawfully, it did not hit the second prong of the statute that is used under this case," he said. "There was no benefit, therefore, it's not a co-conspirator."

Iacobelli's lawyer, David DuMouchel, and Assistant U.S. Attorney Erin Shaw disagree.

Shaw said that rather than make the payments directly from FCA accounts, which could have faced scrutiny from the company's auditors, the illegal payments were purposely routed through and concealed by the training center.

She argued that the training center permitted the UAW to park sham employees under its roof so the UAW could seek reimbursement from FCA. Shaw also said there was never a time when the center couldn't train people because there was not enough money. Since the training center had to submit a draw request to FCA to be reimbursed, it was FCA's money that was taken, not the training center's, she said.

Similarly, DuMouchel said the mere fact that money was taken out of an account does not qualify the training center as a victim under the statute for this case. He also said the scheme could not have been carried out without the training center.

"Virtually all members on the board participated in this scheme, said DuMouchel. "Iacobelli didn't plead to anything that identified the [training center] as a victim. He held to the terms that the IRS is the only victim."

He added: "Iacobelli is not a rogue employee, it's a rogue entity."

U.S. District Judge Paul Borman adjourned the case and ordered Piszczatowski to file a maximum 10-page brief in two weeks. Borman said he will give Shaw and DuMouchel the chance to respond before making a final decision on Iacobelli's sentencing.

It's evident the victims in this scenario are the UAW workers whose money toward continuous training was stolen for personal greed. But how the restitution is allocated will ultimately be up to Borman.

Meanwhile, Shaw publicly confirmed during the hearing that former UAW Vice President Norwood Jewell is among "lots of individuals and entities" under criminal investigation by the federal government in connection with the multimillion-dollar scandal.

Shaw told Automotive News in an email Monday that Jewell has not been charged. She also said she does not have additional information to provide beyond what is in her team's public filings.

Multiple attempts by Automotive News to seek comment from Jewell's lawyer, Joseph Duffy, were unsuccessful. He also didn't respond in a story published by The Detroit News.

Federal officials, as first reported by Automotive News, conducted a search of Jewell's home in late 2017.

Prosecutors contend FCA employees and executives such as Iacobelli paid union workers through the training center and other methods, including credit cards and personal charities, to influence union business, including collective bargaining negotiations in 2011 and 2015.

Feds have identified Jewell's predecessor, General Holiefield, as a key figure in the scandal. Holiefield, who died in March 2015, led the department from June 2006 to June 2014.

The UAW has adamantly denied such activities could have influenced the union's bargaining process.

The union begins a new round of labor contract talks with FCA, Ford Motor Co. and General Motors later this year.