DETROIT -- U.S. District Judge Paul Borman made it clear on Friday that the UAW-Chrysler National Training Center is not entitled to victim status because officials there functioned as a co-conspirator with corrupt Fiat Chrysler Automobiles and UAW officials.
The center functioned as a willing co-conspirator with FCA and the UAW to pass through FCA funds to the center to be distributed to the defendants who colluded with the training center officials in authorizing the illegal payments and credit card expenses, Borman wrote in a court filing.
Consequently, the judge found that the center is not entitled to restitution from former FCA labor relations chief Alphons Iacobelli.
The judge's order ends the argument over whether the center was victimized in the corruption scandal that has led to eight people pleading guilty.
Borman concluded that the center, which is funded by FCA, was in "active collusion" with Iacobelli to transfer illegal payments from the automaker to union officials.
The judge also noted that the center, a joint enterprise between FCA and the UAW, was created for their mutual benefit and under their control.
In February, a restitution hearing for Iacobelli lasted two hours, with arguments over whether the training center was a co-conspirator used to siphon money to crooked former union officials.
At the time, Walter Piszczatowski, a lawyer representing the center, said the 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.
Iacobelli's lawyer, David DuMouchel, and Assistant U.S. Attorney Erin Shaw disagreed.
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. Because 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 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.
DuMouchel told Automotive News Monday that he had no further comment except that he's pleased with the ruling.
Piszczatowski did not immediately respond to a request for comment.
The Detroit News first reported the judge's ruling on Friday.
