Yesterday, a federal grand jury in Kansas indicted seven individuals, including five current and former high-level officers of the Boilermakers Union for alleged roles in a $20 million embezzlement scheme that spanned 15 years.
The defendants, led by 71-year-old former union president Newton Jones and 76-year-old former secretary-treasurer William Creeden are charged with widespread embezzlement of union funds.
Over the last 15 years, the pair led a scheme that included more than $5 million in unnecessary luxury international travel and more than $2 million in salary and benefits to Kateryna Jones and Cullen Jones for no-show jobs. They weren't required to work and 32-year-old Kateryna Jones was paid two years of salary while living in Ukraine and dating Newton Jones. The union also paid for hundreds of fraudulent restaurant charges for the couple.
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The union covered hundreds of thousands of dollars in tuition, rent, and relocation expenses for Newton Jones' family as well as millions of dollars in cash payments for fake vacation time.
Additionally, Newton Jones and 76-year-old former vice president Lawrence McManamon used union funds to spy on employee emails to defend them from internal union charges.
Finally, Newton Jones and Creeden drew $7 million in loans from the Boilermakers Union Fund for the Bank of Labor. Not only were they not authorized to provide the loans, but it was a complete conflict-of-interest. Newton Jones and Creeden allegedly demanded no-show employment with the Bank of Labor and were paid handsomely, including more than $3.4 million each in salary and other benefits.
The defendants also include former president Truman “Warren” Fairley and current secretary-treasurer Kathy Stapp. The defendants are charged with racketeering, embezzlement, health care fraud, wire fraud, and theft in connection with health care and retirement plans.
If convicted, they face 20 years in prison on the RICO conspiracy count. The indictment additionally seeks forfeiture of $20 million.
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