Former Boilermakers Presidents Indicted for Treating Union as “Personal Piggy Bank”
Two former presidents of the Boilermakers Union are among those facing charges for embezzling money from the organization, which represents thousands of industrial construction, maintenance, shipbuilding, mining, and other workers.
A federal jury in Kansas City returned indictments against seven people, including former Boilermakers president Newton Jones, former Boilermakers president Truman “Warren” Fairley, former treasurer-secretary William Creeden, current secretary Kathy Stapp, and former vice president Lawrence McManamon.
Prosecutors say the group, led by Jones and Creeden, engaged in widespread embezzlement of union funds over a 15-year period, eventually embezzling about $20 million.
“This indictment marks an important step in restoring financial security to the Boilermakers Union and control of the union’s future to its membership. The department is committed to protecting union members from officials who abuse their positions of authority for their own personal ends,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division.
The embezzled money was used for a wide variety of expenses including:
· $5 million in unnecessary luxury international travel;
· Over $2 million in salary for no-show jobs for Kateryna Jones and Cullen Jones (who were also charged in the indictment);
· Millions in cash payments for fraudulently claimed vacation time;
· Hundreds of thousands for tuition, rent and relocation for the family of Newton Jones;
· Funds used to expand email surveillance to defend the perpetrators from internal union charges; and
· $7 million in unauthorized loans.
The defendants are facing a slew of charges including conspiracy to commit offenses under the Racketeer Influenced and Corrupt Organizations (RICO) Act, as well as embezzlement, health care fraud, wire fraud, and theft.
The FBI Kansas City Field Office and the Department of Labor (DOL) are investigating the case.
“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,” said District Director Christiane Abendroth of the Department of Labor’s Office of Labor-Management Standards (OLMS).