Boilermakers trial: Union leaders used $20M as ‘personal piggy banks,’ gov’t says
AI-generated summary reviewed by our newsroom.
- Prosecutors allege leaders schemed to steal $20 million in union funds.
- Defendants, including Newton Jones, face racketeering and multiple embezzlement charges.
- Defense attorneys say the government has a theory, not proof beyond a reasonable doubt.
One word came up repeatedly in a federal courtroom in Kansas City, Kansas, on Wednesday as the government laid out its case in the racketeering conspiracy trial of former Boilermakers executives accused of scheming to steal $20 million in union funds.
Greed.
Over the next few weeks, Assistant U.S. Attorney Faiza Alhambra told jurors, they would hear how the defendants used International Brotherhood of Boilermakers money “as their personal piggy banks.”
Four ex-Boilermakers, including ousted International President Newton Jones, face charges alleging they conspired to embezzle millions that went toward salary and benefits for no-show jobs, luxury international travel, fine dining, vacation payouts and unauthorized loans.
Alhambra cited several examples the government said were proof of the misuse of funds.
“No foreign destination was beyond their reach,” she said. “Newton Jones hired family member after family member. His brother, sister, son, daughter and his wife, Kateryna Jones.”
He also enriched himself by firing the CEO of a union-affiliated bank and putting himself in charge, Alhambra said, earning hundreds of thousands a year in that position.
“All of it was illegal,” Alhambra told jurors. “And where did that money come from? It came straight from the pockets of Boilermakers members.”
Attorneys for the defendants, however, contended that the government doesn’t have the evidence to prove there was intent to join a criminal racketeering conspiracy beyond a reasonable doubt. They also said that the defendants’ actions were in accordance with the union’s constitution.
After 15 years of watching the union and digging through its documents, “the government brought us a theory,” Newton Jones’ attorney, Dan Nelson, told jurors. “Not proof. A theory.”
The government’s investigation, Nelson said, “shows union officers trying to do their jobs … build their worldwide brand and attract mergers.”
“The government’s case has examples selected to distract you, and they’re only telling a fraction of the story,” he said. “We will tell the whole story.”
Trial could last several weeks
The trial, in the U.S. District Court for the District of Kansas, is expected to last several weeks. The union’s headquarters was in Kansas City, Kansas, for more than a century, but relocated to Kansas City in 2023.
Jones — who was removed from office by his executive council in 2023 for allegedly misusing union funds — and his wife, Kateryna; former International Secretary-Treasurer William Creeden; and former International Vice President Lawrence McManamon are among seven former union members indicted in August 2024 for conspiracy to commit offenses under the Racketeer Influenced and Corrupt Organizations (RICO) Act, as well as other felonies.
Newton Jones, of Chapel Hill, N.C., is charged with one count of racketeering conspiracy; 41 counts of embezzlement from a labor organization; one count of health care fraud conspiracy; three counts of theft in connection with health care; one count of wire fraud conspiracy; and two counts of theft from an ERISA (the Employee Retirement Income Security Act) program, involving retirement benefits for ineligible individuals.
Creeden, of Kearney, Missouri, faces the same charges as Newton Jones. McManamon, of Rocky River, Ohio, is charged with one count of racketeering conspiracy and six counts of embezzlement from a labor organization.
Kateryna Jones, also of Chapel Hill, is charged with one count of racketeering conspiracy; nine counts of embezzlement from a labor organization; one count of health care fraud conspiracy; and one count of theft in connection with health care.
Two others who were charged in the case pleaded guilty in March to one count of racketeering conspiracy and one count of embezzlement from a labor organization.
Warren Fairley — who took over for a short stint as Boilermakers president in 2023 after Jones was removed — and Jones’ son, Cullen Jones, are scheduled for sentencing on June 30.
The racketeering conspiracy count carries a maximum penalty of 20 years in prison, three years of supervised release and a $250,000 fine. The embezzlement count has a maximum penalty of five years in prison, three years of supervised release and a $10,000 fine.
The other defendant, Kathy Stapp, of Shawnee — the union’s former human resources director-turned International Secretary-Treasurer — pleaded guilty in December 2024 to one count of racketeering conspiracy.
She is scheduled to be sentenced on July 7.
International trips and cushy jobs
In her opening statement, Alhambra said the union was organized in 1880 and is one of the oldest labor unions in the country.
“That’s the union that these defendants took hold of,” she said. “Forty million dollars in 2023 alone was collected from Boilermakers members as dues.” And Jones, who was president for 20 years after being handed the position by his father, had a duty to spend that money only for the benefit of union members, she said.
Instead, Alhambra said, he hand-picked “yes-men” and elevated them to the highest positions in the union to keep them indebted to him. Among the “yes-men,” she said, were Creeden and McManamon.
Kateryna Jones, she said, is a Ukrainian national who married Newton Jones in 2011 at age 19. Newton Jones set up a second residence in Ukraine, Alhambra said, and in 2013 he appointed Kateryna as his executive assistant.
In 2015, Alhambra said, when Kateryna was able to move to the U.S., Newton Jones authorized payments to her for union work she allegedly did in Ukraine — even though nobody seemed to know what that work was.
She eventually made $165,000 a year for doing little work, Alhambra said.
All the defendants spent millions of the union’s dollars on international travel, Alhambra said.
“Many of those trips were a sham,” she said. “They were an excuse to travel on the union’s dime.”
On one trip, Newton Jones took 16 people to Sardinia, Italy, at the union’s expense, staying in lavish hotels costing up to $1,500 a night, Alhambra said. On a trip to Australia for a conference in Perth, she said, Kateryna and Newton Jones and McManamon stayed in Sidney and never made it to the conference. That trip, Alhambra said, cost the union $92,000
Newton Jones also made personal trips to Ukraine, Alhambra said. “All of these trips came from the pockets of union members,” she said.
Alhambra said Newton Jones gave cushy jobs to his family members even though they weren’t qualified for those positions. His son Cullen Jones’ performance was so abysmal, she said, that Newton Jones fired and rehired him several times. He eventually was paid $160,000 a year.
Newton Jones hired his daughter as a graphic artist right out of college, Alhambra said. Then he directed the union to pay for her and her boyfriend’s relocation to Kansas City and pay for their rent for one year. The cost to the union, she said, was $48,000. And while other union staffers were being laid off or furloughed, she said, Jones gave his daughter and her boyfriend raises.
Over the years, Alhambra said, rank-and-file members complained about Jones’ actions, and some nicknamed him “Lord Newton Jones.”
Defense attorneys say no proof of conspiracy
Nelson told jurors that Newton Jones had joined the Boilermakers at 18 and “has given his heart and soul” to the union. When Jones became international president in 2003, Nelson said, the union was facing “unprecedented challenges.”
Jones implemented cost-cutting measures, Nelson said, including slashing the number of international vice presidents from 13 to six. And he saved the Bank of Labor, Nelson said, doubling its total assets and bringing in new business.
Nelson said both Jones’ and Creeden’s positions at the bank were approved by the union’s International Executive Council and the bank board.
Evidence in the trial will show that Jones’ travel to international destinations was essential for him to run the union successfully, Nelson said. He said Jones cultivated new relationships on the trips, which benefitted the union financially.
As for holding events at expensive hotels and dining in fine restaurants, Nelson said that the leaders Jones was networking with on the international trips don’t hold their conferences at the Red Roof Inn or have lunches at Wendy’s.
Every year for a decade, Nelson said, independent auditors examined the union’s expenses, looking for any red flags.
“And every year, the auditors signed their names on clean audits,” he said.
Creeden’s attorney, Andino Reynal, told jurors that the government decided his client was guilty “simply because he was secretary-treasurer of this organization.”
Reynal said the union’s International Executive Council — which is composed of the international president and five international vice presidents — oversees its practices. The secretary-treasurer is not part of the chain of command and is not responsible for approving expenses, he said.
“The evidence will show that the president issues orders, and the treasurer issues checks,” he said. “Every single expense that you’re going to see in this case complied with the union’s policies, procedures and practices.”
John Davis, who is representing Kateryna Jones, said though she and Newton Jones were married in 2011, she wasn’t granted a Green Card to come to the U.S. until December 2014. So she worked for the Boilermakers in Ukraine, Davis said, translating union documents into Russian and Ukrainian languages, assisting Newton Jones at meetings, arranging travel and managing his business receipts.
Davis said Kateryna Jones is “the odd woman out” in the case. She’s not on the International Executive Council, did not approve expenses, design policies or write checks, and has nothing to do with the Bank of Labor, he said.
“Kateryna Jones did not join in a conspiracy … and the evidence will reflect that,” he said. “The only agreement she entered into was a marriage agreement.”
Meetings in Paris and Hawaii
McManamon was rarely around the other defendants, his attorney, Kevin Spellacy, told jurors. None had been to his home, nor had he been to theirs, he said.
McManamon submitted an expense report for every dime he received, Spellacy said. And he attended five conferences, but went on those trips at Newton Jones’ direction.
There is no proof that McManamon was involved in any conspiracy, Spellacy said.
“The truth is, the only thing Larry McManamon joined was the Boilermakers union 57 years ago … and for that, they call him a racketeer,” he told jurors.
“Our request is real simple … let your common sense lead you to the right outcome.”
Timothy Simmons, the Boilermakers’ current international president, was the government’s first witness.
He said he became a member of the International Executive Council in February 2023. During the meetings he attended, Simmons said, he never saw the council review the American Express credit cards of Newton or Kateryna Jones or Creeden.
Vince Falvo, who is with the Justice Department’s Violent Crime and Racketeering Section, questioned Simmons about several executive council meetings that were held overseas. A June 2021 meeting was held at the Hotel de Crillon in Paris, described on its website as “a luxury hotel in Paris that is timeless and unabashedly elegant.” Another meeting, in June 2012, was in Copenhagen, Denmark.
Though the meetings usually lasted one or two days, Simmons said, Jones would usually arrive prior to the events and stay afterward. Sometimes, Simmons said, the meetings started late because Jones wasn’t there yet.
“There were times he would appear to be hung over,” he said.
Minutes from an October 2019 meeting at the Grand Wailea resort in Maui showed that about 30 people went on the trip, including Newton Jones’ son, brother, daughter and her boyfriend and Creeden’s son — all union employees at the time.
Simmons said he knew of no reason why they all needed to be at the executive council meeting.
Falvo asked him if there was any reason the International Executive Council meetings couldn’t be held in Kansas City.
“None that I’m aware of, sir,” Simmons said. After Jones was ousted as president, Simmons said, the executive council started meeting in Kansas City or in conjunction with another union conference.
