Two former presidents of the Boilermakers International Union have been involved in a $20M indictment.
A federal grand jury in the state of Kansas indicted the former presidents alongside seven individuals from the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers and Helpers (Boilermakers Union).
District Director Christiane Abendroth of the Department of Labor’s Office of Labor-Management Standards (OLMS) was stark in their review of the court proceedings.
“Today’s indictment of seven defendants, including five current and former high-level officers, is a direct result of OLMS’s audit findings and a multi-agency criminal investigation. We look forward to obtaining justice for the rank-and-file union members by removing officers who allegedly treated the union as their personal piggy bank.”
Seven indicted in Boilermakers International Union case
The defendants involved in the indictment 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.
The defendants have been indicted on conspiracy to commit offenses under the Racketeer Influenced and Corrupt Organizations (RICO) Act. They have also been charged with separate counts involving healthcare fraud, wire fraud, and theft of assets in retirement plans.
According to the court report, the widespread embezzlement of the funds of the Boilermakers Union allegedly included:
- Over $5 million in unnecessary luxury international travel;
- Over $2 million in salary and benefits to Kateryna Jones and Cullen Jones for no-show jobs, at which they were not required to work, including payment of two years of salary to Kateryna Jones for a period when she resided in Ukraine and was dating Newton Jones;
- Hundreds of thousands of dollars in tuition, rent, and relocation expenses for members of the family of Newton Jones;
- Millions of dollars in cash payments relating to fraudulently claimed vacation time;
- Hundreds of fraudulent restaurant charges by Newton Jones and Kateryna Jones in their hometown;
- Funds wrongly expended to engage in email surveillance of Union employees to defend Newton Jones and McManamon from internal union charges; and
- $7 million in loans from the Boilermakers Union MORE Fund executed by Newton Jones and Creeden to the Bank of Labor, which were not authorized under the terms of the Boilermakers Union constitution or its conflict-of-interest policy.
A maximum penalty of 20 years in prison on the RICO conspiracy count faces the group if convicted.
“Union members pay their dues believing union leaders will use the money in support of the organization’s mission to advocate for and protect employment rights,” said U.S. Attorney Kate E. Brubacher for the District of Kansas.
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