Former UAW regional director and board member pleads guilty to racketeering and embezzlement conspiracy

 

Date: February 7, 2020

Contact: newsroom@ci.irs.gov

Vance Pearson, the former Director of the United Auto Worker's Region 5 and a former member of the UAW's International Executive Board, pleaded guilty today to conspiring with other UAW officials to embezzle hundreds of thousands of dollars of UAW dues money and to further racketeering activity announced Sarah Kull, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations.

Vance Pearson of St. Charles, Missouri pleaded guilty to conspiring to embezzle UAW dues money and conspiring to use a facility of interstate commerce to aid racketeering crimes between 2010 and September 2019. Between June 2018 and September 2019, Pearson served as the Director of Region 5 of the International Union, United Automobile, Aerospace, and Agricultural Workers of America ("UAW"). The UAW's Based on his racketeering and embezzlement conspiracy conviction, Pearson faces a maximum of five years in prison and a fine of up to $250,000.

As part of his guilty plea, Pearson agreed to forfeit $81,000 from his so-called "Flower Fund." A UAW Regional Director's Flower Fund was ostensibly to be used for the purchase of flowers for the funerals of UAW members and their families. In practice, however, UAW officials have been forced to pay into the flower funds and the money has been exploited by senior UAW officials for their own personal use. In addition, Pearson agreed to forfeit $38,000 held in a "Members in Solidarity," which was an account ostensibly to be used for campaign expenses associated with UAW elections. Finally, Pearson agreed to forfeit the set of custom made Titleist golf clubs seized from his office and which was paid for with UAW dues money.

Pearson is the twelfth defendant to plead guilty in connection with the ongoing criminal investigation into illegal payoffs to UAW officials by FCA executives and corruption within the UAW itself. The following individuals have already pleaded guilty to their participation in the scheme and have been sentenced: former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA's Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), and former UAW Vice President Norwood Jewell (15 months in prison). In addition, the following UAW officials have pleaded guilty and are awaiting sentencing: former UAW Vice President Joseph Ashton, former senior UAW official Michael Grimes, and former senior UAW official Jeffrey "Paycheck" Pietrzyk. Former UAW Official Edward "Nick" Robinson has been charged in a criminal information, and his case is still pending.

The Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation conducted the criminal investigation into labor corruption activities involving a vital sector of the local and national economy.

"As Director of the UAW's Region 5, Vance Pearson was responsible for serving the interests of tens of thousands of UAW members across 16 states. Instead, Pearson assisted in orchestrating an ongoing criminal enterprise to enjoy a life of absolute luxury, spending hundreds of thousands of dollars with his co-conspirators in union member dues on golf, custom clubs, cigars, booze, vacations and high-end restaurants. IRS-CI is committed to investigating crimes of embezzlement, conspiracy and racketeering," stated Sarah Kull, Special Agent in Charge of Detroit's IRS Criminal Investigation.

"Vance Pearson failed his fiduciary duties as a UAW officer when he used his position to embezzle over $100,000 of UAW funds so he and his co-conspirators could live a lavish lifestyle at the expense of the union members he was elected to represent," said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor- Management Standards. "OLMS will continue to work with the U.S. Attorney's Office and our fellow law enforcement agencies to eliminate the corruption within the UAW International Union."

"Vance Pearson conspired with senior UAW officials to embezzle hundreds of thousands of dollars in union dues to further their racketeering activity. His actions were an effort to personally enrich himself at the expense of dues-paying UAW members. We will continue to work with our law enforcement partners to protect the financial integrity of labor organizations," stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

"Mr. Pearson is the twelfth UAW official to plead guilty as a result of a criminal investigation which has made clear that corruption has become systemic within this organization," said SAC D'Antuono. "The FBI and our law enforcement partners are committed to doing what is necessary to restore this great organization to its original purpose – serving hard-working union families, not enriching the powerful few."

"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 United States Attorney Matthew Schneider. "The UAW needs to be led by men and women of integrity who are dedicated to bettering the lives of the hard-working members of the union, not dedicated to lining their own pockets."

The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey and Steven Cares.