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The defendants are:

• Former union president Newton Jones, 71, of Chapel Hill, North Carolina
• Former Secretary-Treasurer William Creeden, 76, of Kearney, Missouri
• Former President Truman “Warren” Fairley, 59, of Chapel Hill
• Current Secretary-Treasurer Kathy Stapp, 53, of Shawnee, Kansas
• Former Vice President Lawrence McManamon, 76, of Rocky River, Ohio
• Kateryna Jones, 32, of Chapel Hill
• Cullen Jones 35, of Chapel Hill

U.S. Attorney Kate E. Brubacher for the District of Kansas said:

“Union members pay their dues with the confidence that union leaders will use the money to support the organization’s mission: advocating for and protecting labor rights.

“The Department of Justice is very concerned when there are allegations of fraud and embezzlement of union funds.

The accusations

It is alleged that the defendants, led by Newton Jones and William Creeden, committed large-scale embezzlement of funds from the Boilermakers Union over a 15-year period, including:

• Over $5 million in unnecessary luxury international travel;
• More than $2 million in salary and benefits to Kateryna Jones and Cullen Jones for jobs that did not require them to work, including paying Kateryna Jones two years’ salary for a period when she lived in Ukraine and was in a relationship with Newton Jones;
• Hundreds of thousands of dollars in tuition, rent and moving expenses for Newton Jones’ family members;
• Millions of dollars in cash payments related to fraudulently claimed vacation days;
• Hundreds of fraudulent restaurant bills by Newton Jones and Kateryna Jones in their hometown;
• Funds improperly spent on email surveillance of union employees to defend Newton Jones and McManamon against internal union charges; and
• Loans of $7 million from the Boilermakers Union MORE Fund, made by Newton Jones and Creeden to the Bank of Labor, which were not authorized under the provisions of the Boilermakers Union’s bylaws or conflict of interest policy.

The indictment also charges Newton Jones and Creeden with fraud in connection with their alleged application for and acceptance of employment with the Bank of Labor, for which they each received more than $3.4 million in salary, bonuses and other paid benefits.

The indictment also seeks the forfeiture of $20 million.

If convicted, the defendants face a maximum sentence of 20 years in prison on the RICO conspiracy charge. A federal district judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

• An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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