A federal grand jury in Kansas has indicted seven individuals, including five current and former high-ranking officers of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (Boilermakers Union), for their alleged involvement in a $20 million embezzlement scheme spanning 15 years.
The indictment includes charges under the Racketeer Influenced and Corrupt Organizations (RICO) Act, as well as embezzlement, health care fraud, wire fraud, and theft related to health care and retirement plans.
“As alleged in the indictment, these defendants, including two former presidents of the Boilermakers Union, enriched themselves by spending millions of dollars in union funds for their own benefit,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri. She emphasized that this legal action aims to restore financial security to the union and return control to its members. “The department is committed to protecting union members from officials who abuse their positions of authority for their own personal ends.”
The defendants include former union president Newton Jones; former secretary-treasurer William Creeden; former president Truman “Warren” Fairley; current secretary-treasurer Kathy Stapp; former vice president Lawrence McManamon; Kateryna Jones; and Cullen Jones.
“Union members pay their dues believing union leaders will use the money in support of the organization’s mission,” stated U.S. Attorney Kate E. Brubacher for the District of Kansas. “The Department of Justice is deeply concerned whenever there are accusations of fraud and misappropriation of union funds.”
Special Agent in Charge Stephen A. Cyrus of the FBI Kansas City Field Office remarked on the breach of trust involved: “By allegedly unlawfully misappropriating Union funds, the defendants betrayed their members’ trust and confidence.”
District Director Christiane Abendroth from the Department of Labor’s Office of Labor-Management Standards (OLMS) noted that this indictment results from OLMS audit findings and a multi-agency investigation: “Today’s indictment...is a direct result... We look forward to obtaining justice for rank-and-file union members by removing officers who allegedly treated the union as their personal piggy bank.”
According to allegations, over 15 years Newton Jones and William Creeden led activities involving:
- Over $5 million on unnecessary luxury international travel;
- Over $2 million on no-show jobs for Kateryna Jones and Cullen Jones;
- Hundreds of thousands on tuition, rent, relocation expenses for Newton Jones's family;
- Millions on fraudulent vacation time claims;
- Hundreds on fraudulent restaurant charges by Newton Jones and Kateryna Jones;
- Funds used improperly for email surveillance defending against internal charges;
- $7 million unauthorized loans from Boilermakers Union MORE Fund to Bank of Labor.
Additionally, Newton Jones and Creeden face wire fraud charges related to no-show employment at Bank of Labor where they allegedly received more than $3.4 million each in salary and benefits. The indictment seeks forfeiture amounting to $20 million.
If convicted, each defendant could face up to 20 years in prison under RICO conspiracy counts. Sentencing will be determined by a federal district court judge considering U.S. Sentencing Guidelines.
The case is being investigated by the FBI Kansas City Field Office and Department of Labor with prosecution led by Trial Attorney Vincent Falvo along with Assistant U.S. Attorneys Faiza Alhambra and Jabari Wamble.
An indictment is an allegation only; all defendants are presumed innocent until proven guilty beyond a reasonable doubt.