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General Motors LLC has filed suit against one of its former directors, a former union official, whom it charges participated in two “sprawling and long-running criminal schemes.”
Joseph Ashton, a former high-ranking officer of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, served as a GM board director from August 2014 to December 2017, according to the complaint filed Sept. 14 in U.S. District Court in Camden, New Jersey, in General Motors LLC, General Motors Co. v. Joseph Ashton. The lawsuit was previously reported on by the D&O Diary.
“GM discovered these schemes only recently, following dozens of indictments and guilty pleas involving Ashton and his co-conspirators,” according to the complaint, which states that Mr. Ashton pleaded guilty to conspiring to commit wire fraud and money laundering on Dec. 4, 2019.
The complaint says that along with two other UAW officials, Mr. Ashton “orchestrated a criminal kickback scheme to siphon money” from the UAW-GM Center for Human Resources, where they served on the board and were responsible for, or had influence over, contract approvals.
The complaint states also that Mr. Ashton was involved in a bribery scheme under investigation by the U.S. Attorney for the Eastern District of Michigan in Detroit involving competitor FCA US LLC, which manufactures Chrysler and Fiat cars, and Fiat Chrysler Automobiles N.V. and certain former union leaders.
“FCA and FCA NV authorized these bribes specifically to harm GM and to advance their long-term goal to force higher costs on GM and assist FCA NV in forcing a merger with GM,” the complaint says.
In August, a federal judge in Detroit rejected a GM bid to reinstate a racketeering lawsuit against Fiat Chrysler Automobiles NV in which it claimed it had new information on foreign accounts used in an alleged bribery scheme involving FCA and UAW leaders.
The complaint filed last week charges Mr. Ashton with breach of fiduciary duty and fraud.