Prosecution rests on Day 15 of Boilermakers racketeering conspiracy trial in KCK
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- The government rested on Day 15 of the Boilermakers racketeering trial.
- Four ex-Boilermakers, including Newton Jones, are charged with conspiring to embezzle.
- Three other defendants have pleaded guilty and have scheduled sentencing dates.
After absorbing three weeks of testimony in the federal racketeering conspiracy trial of former Boilermakers union executives, jurors got welcome news just after lunch on Friday.
“Ladies and gentlemen of the jury, the government rests,” said Assistant U.S. Attorney Faiza Alhambra.
And an hour later, after the defense presented its first witness, Senior U.S. District Court Judge Daniel Crabtree released the 14-member panel early for the three-day weekend.
The action came on Day 15 of the trial in the U.S. District Court for the District of Kansas, with prosecutors wrapping up their case alleging the Boilermakers employees schemed to steal millions in union funds.
Four ex-Boilermakers, including ousted International President Newton Jones, are accused of conspiring to embezzle millions that went toward salary and benefits for no-show jobs, luxury international travel, fine dining, vacation payouts and unauthorized loans.
The trial, in Kansas City, Kansas, resumes Tuesday morning. The union’s headquarters was in Kansas City, Kansas, for more than a century, but relocated to Kansas City in 2023.
Jones, 72 — who was removed from office by his executive council in 2023 for allegedly misusing union funds — his wife, Kateryna, 33; ex-International Secretary-Treasurer William Creeden, 78; and former International Vice President Lawrence McManamon, 78, are among seven former union members indicted in August 2024 for conspiracy to commit offenses under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, as well as other felonies.
Day after day, the government has provided a multitude of examples of what it says is proof that the defendants were using union money as their personal piggy banks. Pricey hotel suites. Trips to Italy, Switzerland, Spain, France and other countries, complete with luxury dining and side excursions. Flights on a private jet. Hundreds of thousands of dollars in payouts for unused vacation days and unmonitored use of union credit cards.
Other examples included charges for “significant” amounts of alcohol, high-paying jobs for family members who allegedly performed little work, and full-time salaries and bonuses of $442,000 to nearly $500,000 a year for Jones and Creeden at the union-owned Bank of Labor, where they held executive positions while at the same time drawing hefty union salaries.
Attorneys for the defendants contend that the government doesn’t have the evidence to prove beyond a reasonable doubt that there was intent to join a criminal racketeering conspiracy. They also argue that the defendants acted in accordance with the union’s constitution.
The government’s investigation, they say, shows that union officers were simply trying to do their jobs, which included building a worldwide brand and attracting mergers.
After the government rested its case on Friday, attorneys for all four defendants filed motions for judgments of acquittal.
Defense presents first witness
The defense began presenting its case Friday with testimony from Daniel Welsh, a longtime certified public accountant. Now retired, Welsh said, he does part-time consulting that includes providing testimony in civil and criminal cases.
Welsh said he reviewed the work of the Boilermakers’ auditing firm, Legacy Professionals LLP, which conducts audits for hundreds of labor organizations. The annual Boilermakers audits, Welsh said, were full-scope audits that involved assessing the risk of fraud and looking for indications of embezzlement and mishandling of funds.
Welsh said his review determined that Legacy Professionals performed the Boilermakers audits according to Generally Accepted Auditing Standards, examining union credit card expenses, salaries, reimbursements to employees and vacation accruals. He said the audits identified some major expenses, but concluded that those expenses were “reasonable.”
On cross-examination, Welsh said he had never had a labor union for a client and that he had not interviewed anyone from Legacy Professionals when conducting the review of their audits.
Prosecutor Vincent Falvo asked Welsh if he was aware that there also had been a forensic audit of the Boilermakers union regarding Newton and Kateryna Jones’ expenses and Newton Jones’ trips to Ukraine using union money.
Previous witnesses testified that when Newton Jones married Kateryna in 2011, she was a resident of Ukraine and he made numerous trips there before she moved to the United States in 2015.
Falvo then displayed for jurors a page from the forensic audit report. It said that from 2013 to 2023, the Joneses spent $104,957 on meals in and near their hometown of Chapel Hill, North Carolina, that had no business purpose.
Another page from the forensic report showed Newton Jones spent $200,499 on travel to Poland and Ukraine.
Welsh said he was not aware of the forensic audit but said if he’d encountered those issues, “I’d want to know the business purpose.”
Other Boilermakers have pleaded guilty
In addition to the four former Boilermakers on trial, three others who were charged in the case have already pleaded guilty. Warren Fairley — who took over for a short stint as Boilermakers president in 2023 after Jones was removed — and Jones’ son, Cullen Jones, pleaded guilty in March to one count of racketeering conspiracy and one count of embezzlement from a labor organization.
They are scheduled to be sentenced 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 — the union’s former human resources director-turned International Secretary-Treasurer — pleaded guilty in December 2024 to one count of racketeering conspiracy. Her sentencing is scheduled for July 7.
Both Fairley and Stapp testified at the trial as witnesses for the government.
Adam Mendenhall, a member of the Boilermakers’ Kansas City-based Local 83 who has attended much of the trial, said Friday that he was sickened by the things he was hearing.
“I’m completely disgusted with all of the truths that are coming out,” he said. “And now knowing just how bad they have lied to us and the fact that they feel that they have done nothing wrong … it’s almost like they feel they deserve everything that has been stolen from us.”
