DETROIT – Former United Auto Workers Regional Director Vance Pearson pleaded guilty Friday in the conspiracy to embezzle hundreds of thousands of dollars from the UAW so he and other officials could live a “lavish” lifestyle, buying golf equipment, expensive villas, cigars and more.
Pearson, 58, of St. Charles, Missouri, is accused of conspiring to aid racketeering crimes between 2010 and September 2019.
He admitted during a plea hearing that he conspired with at least six other senior UAW officials in a multiyear conspiracy to embezzle money from the UAW for personal benefit, officials said. Pearson and other officials hid their person expenditures in the cost of UAW Region 5 conferences held in Palm Springs, California, Coronado, California and Missouri, according to authorities.
More about Pearson
Pearson was the director of Region 5 of the International Union, United Automobile, Aerospace and Agricultural Workers of America between June 2018 and September 2019. The region is headquartered in Hazelwood, Missouri, and covers the tens of thousands of UAW members in Missouri and the 16 states to the southwest, including California and Texas.
“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,” U.S. Attorney Matthew Schneider said. “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.”
Pearson was also a member of the UAW’s International Executive Board, which governs the affairs of the union. He was the assistant director of Region 5 from 2016 to June 2018.
“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 of the 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.”
Money embezzled for ‘lavish’ lifestyle
Between 2010 and 2018, Pearson and others would submit fraudulent expense forms seeking reimbursement from the UAW’s Detroit headquarters, officials said. They claimed that money was used in connection with leadership and training conferences, but they were actually using those conferences to hide the hundreds of thousands of dollars in UAW funds spent on “lavish entertainment and personal spending,” federal officials said.
Pearson and other senior UAW officials used union money to buy sets of golf clubs, individual clubs and other gold equipment that cost thousands of dollars, officials said. They spent more than $100,000 to buy golf clothing, shirts, hats, sunglasses, jackets, golf balls and fashion shorts from pro shops in California and Missouri, court records show.
“His actions were an effort to personally enrich himself at the expense of dues-paying UAW members,” said Irene Lindow, the special agent in charge of the Chicago region of the U.S. Department of Labor Office of Inspector General.
They also spent tens of thousands of dollars in UAW funds on green fees and golfing at the Indian Canyons golf course in Palm Springs outside the time of the UAW conferences, officials said.
Pearson and other officials also spent hundreds of thousands of dollars in union funds to rent villas in gated communities in Palm Springs. Those villas were used by senior UAW officials for long periods of time outside the dates set for the conferences, according to authorities.
In one instance, high-level UAW official used a Palm Springs villa for four months, and it was paid for with UAW funds, officials said.
UAW money was also used to pay for meals for senior UAW officials at high-end restaurants outside the time periods of the conferences, authorities said.
Pearson was also involved in the embezzlement of $60,000 for the purchase of boxes of cigars, humidors, cigar cutting equipment and lighters from 2014 to 2018, according to court records. The cost of the cigars was hidden within expenses for the Region 5 conferences, officials said.
Authorities said Pearson caused the UAW to file false reports with the Department of Labor because the embezzlement activity was concealed.
When federal agents executed search warrants in August 2019, they recovered dozens of cigars, humidors and other tobacco-related items from the homes of UAW officials, court records show.
Agents also found hundreds of high-end bottles of liquor, hundreds of golf shirts, multiple sets of golf clubs and more than $30,000 in cash, according to authorities.
Multiple sets of golf clubs paid for with embezzled UAW funds were seized from Pearson’s UAW office, officials said.
“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," said Sarah Kull, the special agent in charge of Detroit’s IRS Criminal Investigation. “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.”
Pearson is also accused of conspiring with UAW officials to aid racketeering activity through the internet and email.
He pleaded guilty to conspiring with other UAW officials to embezzle hundreds of thousands of dollars in UAW dues money and to further racketeering activity.
Based on the embezzlement and racketeering convictions, Pearson faces up to five years in prison and a fine of up to $250,000.
As part of his plea deal, Pearson agreed to forfeit $81,000 from his “Flower Fund,” which was to be used for the purchase of flowers for the funerals of UAW members and their families. In reality, UAW officials were exploiting the money for their own personal use while members were forced to contribute to the fund, court records show.
He will also forfeit $38,000 in a “Members in Solidarity” fund, which was to be used for campaign expenses associated with UAW elections, officials said.
Pearson will also forfeit a set of custom Titleist golf clubs that were paid for with UAW dues money, officials said. Agents said they seized the clubs from Pearson’s office.
The union released the following statement on Pearson’s guilty plea:
“Vance Pearson blatantly violated his oath of office and betrayed the trust of all our hard-working members. In November 2019, the UAW International Executive Board filed its own action against Mr. Pearson not just to remove him from his elected position but taking away his membership in the UAW entirely. While our Union is moving forward, we will never forget the costly lessons from our past.
“Under the leadership of President Rory Gamble in his first few days in office, working tirelessly with the board, the UAW continues to implement a series of critical reforms necessary to strengthen the union’s financial controls, oversight, and its overall accounting system so this type of conduct cannot happen again. It should be emphasized that despite inaccurate reporting by some media outlets -- purportedly based on unnamed, unidentified, and anonymous “sources” -- the federal government has never said or even suggested that President Rory Gamble is a target of its investigation. Indeed, just the opposite. More importantly, under his leadership, the board and UAW continue to aggressively implement these critical reforms and pursue additional reforms.”
12 officials have pleaded guilty in scandal
Pearson is the 12th person to plead guilty in connection with the ongoing investigation into illegal payoffs to UAW officials by FCA executives and corruption within the union, according to authorities.
Here are the other UAW officials who have already pleaded guilty to a role in the scheme and 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 official Virdell King -- 60 days in prison
- Former senior UAW official Keith Mickens -- 12 months in prison
- Former senior UAW official Nancy A. Johnson -- 12 months in prison
- Former senior UAW official Monica Morgan, the widow of UAW Vice President General Holiefield -- 18 months in prison
- Former UAW Vice President Norwood Jewell -- 15 months in prison
- Former VP of UAW’s General Motors Department Joseph Ashton -- pleaded guilty and awaiting sentencing
- Former senior UAW official Jeffrey Pietrzyk -- pleaded guilty and awaiting sentencing
- Former senior UAW official Michael Grimes -- pleaded guilty and awaiting sentencing
- Former UAW officials Edward “Nick” Robinson has been charged in a criminal information, but his case is still pending
“Mr. Pearson is the 12th 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 Steven D’Antuono, the special agent in charge of the Detroit office of the FBI. “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.”