Jury to begin deliberations Tuesday in Boilermakers racketeering trial in KCK
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- Jury deliberations are expected to begin Tuesday afternoon.
- Prosecutors allege the four embezzled millions for salaries, benefits and luxury travel.
- Three other defendants pleaded guilty to racketeering conspiracy in this case.
The fate of four former Boilermakers charged with embezzling millions from their Kansas City-based union should be in jurors’ hands by Tuesday afternoon in the weekslong racketeering trial in Kansas City, Kansas.
Closing arguments ran all day Monday in the U.S. District Court for the District of Kansas and are expected to wrap up by lunchtime on Tuesday, Senior U.S. District Judge Daniel Crabtree told attorneys.
The government spent an hour and 45 minutes Monday morning — Day 20 of the trial — telling jurors why they should convict the former Boilermakers, including ousted International President Newton Jones. The four are accused of using union funds for salaries and benefits for no-show jobs, luxury international travel, fine dining, vacation payouts and unauthorized loans.
For three weeks, federal prosecutor Faiza Alhambra said, the government has presented testimony from witnesses and provided examples of the defendants’ greed.
“These defendants, they took and they took and they took money that didn’t belong to them,” Alhambra said. That taking continued, she said, until Jones “was kicked out the door.”
Newton Jones, 72, and his wife, Kateryna, 33, of Chapel Hill, North Carolina; former International Secretary-Treasurer William Creeden, 78, of Kearney, Missouri; and former International Vice President Lawrence McManamon, 78, of Rocky River, Ohio, all participated in the taking, she said.
“The men and women who are members of this union … every dollar they own matters to them and their families,” Alhambra said. “It is their money that was stolen. They are the reason we are here.”
The four defendants were 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 embezzlement, health care fraud, wire fraud and other felonies.
The racketeering conspiracy count carries a maximum penalty of 20 years in prison, three years of supervised release and a $250,000 fine.
On Thursday, Crabtree acquitted McManamon on the racketeering conspiracy charge on the grounds that the evidence against him was insufficient to find guilt beyond a reasonable doubt. Several embezzlement counts against McManamon remain.
Attorneys for the defendants argued throughout the 20-day trial that the spending characterized by prosecutors as embezzlement was instead conducted openly and in accordance with the union’s constitution. They also said that the government could not prove beyond a reasonable doubt that their clients intended to join a criminal racketeering conspiracy.
Family members’ high-paying jobs
During closing arguments Monday, Alhambra said that in 2013, Kateryna Jones was a 20-year-old Ukrainian woman with no ability to come to the United States when Newton Jones gave her a job with the union. She said when she arrived in the U.S. in 2015, Newton Jones directed Creeden to pay her for the work she allegedly did back in Ukraine.
“What could she possibly be doing day in and day out that would merit a full-time job?” Alhambra asked. She said witnesses testified that they didn’t even know she was employed while living in Ukraine and that they didn’t observe her doing any work.
“Being your husband’s companion is not a union job,” Alhambra said.
Alhambra said Kateryna Jones’ salary, benefits and vacation pay were significant.
“We’re here about 1.7 million dollars that Mrs. Jones received in salary and expenses over 10 years,” she said. “The witnesses told you these expenses, over and over again, were not authorized.”
Creeden had a duty to oversee how the union money was spent, Alhambra said: “The secretary-treasurer holds the purse strings.”
Alhambra said the union’s constitution is a system of checks and balances. The union’s former law firm, Blake & Uhlig, even wrote in a 2022 memo that “the international president cannot spend as he sees fit,” she said.
“They knew exactly what the law was,” Alhambra said. “They just didn’t apply it to themselves … They believed they were above the law. Entitlement. That’s what is happening here.”
Newton Jones put his son, Cullen, on the Boilermakers payroll in 2007 at age 24, Alhambra said. Witnesses testified that he was not productive and would disappear for weeks at a time, she said. He was laid off and then rehired multiple times.
Alhambra said Cullen Jones was making $160,000 a year even though the union was paying a film company to do the work Cullen was hired to do. He ended up being paid $1.7 million in union money, she said.
Jones created positions for his daughter, Shae Jones, and her boyfriend, Derek Zurowski — later her husband — right out of college, Alhambra said. And when other employees were getting furloughed, Alhambra said, Shae Jones and Zurowski got raises. The union also paid their relocation expenses from North Carolina to Kansas City and paid their rent.
The union’s total payments to Shae Jones for salary and expenses was more than $490,000, and to Zurowski, more than $734,000, the government said.
Health care fraud allegations
To be eligible for the union’s health care benefits, Alhambra said, Boilermakers had to be employed 90 days and work at least 30 hours a week.
“Kateryna Jones and Cullen Jones never worked 30 hours a week,” Alhambra said. Providing them with benefits, she said, was an act of fraud.
She reminded jurors of the case of a friend of both Jones and Creeden who served on the board of directors of the union-affiliated Bank of Labor and had been diagnosed with terminal brain cancer. In April 2018, Alhambra said, Jones asked then-HR director Kathy Stapp to add the man to the union payroll as an assistant to the president.
Stapp — who also was charged in the case and pleaded guilty prior to the trial — testified that she was directed to back-date the man’s appointment letter to Jan. 1, 2018, so he and his family could receive immediate coverage. She said she knew doing so was illegal and “made my stomach hurt,” but did it because she feared for her job if she didn’t comply.
The union paid the man’s salary for April and May 2018, Stapp testified, and provided full health and pension benefits and a life insurance policy even though he wasn’t eligible. After he died on June 1, 2018, the union paid an additional month’s salary plus five weeks’ vacation, she said.
Alhambra said Monday that the man never worked for the union.
“You cannot steal other people’s money to help a friend,” she told jurors. “This is fraud. This is theft.”
International travel and Bank of Labor salaries
Regarding international travel to expensive destinations, Alhambra told jurors, “Mr. Jones liked going on European vacations.”
“You saw the types of places they were staying at,” she said. “You heard about $1,900 a night hotel rooms. Ask yourselves — is that to the union’s benefit?”
Trips to Italy over a decade that were purportedly to discuss a merger with another organization were “a sham,” she said, costing the union more than a million dollars.
Alhambra said Jones’ and Creeden’s employment at the Bank of Labor, of which the union is a majority shareholder, constituted wire fraud conspiracy. Jones made himself the bank CEO in 2010 and created the position of senior executive vice president for Creeden, the government said.
Not only were the two receiving pay as members of the banks’ board of directors, Alhambra said, but they also received salaries for the alleged full-time positions of CEO and senior executive vice president of the bank even though they performed no more work than they did as board members.
“The Jones Enterprise”
Alhambra saved the racketeering conspiracy count — described as “The Jones Enterprise” — for last.
Three others charged in the case have already pleaded guilty to racketeering conspiracy. Warren Fairley — who briefly took over as Boilermakers president in 2023 after Jones was removed — and Cullen Jones pleaded guilty in March to one count of racketeering conspiracy and one count of embezzlement from a labor organization. Both are scheduled to be sentenced June 30.
Stapp, who became the union’s international secretary-treasurer when Creeden resigned in 2023, pleaded guilty in December 2024 to one count of racketeering conspiracy. Her sentencing is scheduled for July 7.
And in a related case, another former union executive, Tyler Brown, pleaded guilty in May 2024 to one count of racketeering conspiracy. Brown, who served as the union’s chief of staff and as special assistant to Jones, was accused of scheming with “others known and unknown” to steal from the union. His sentencing is also scheduled for July 7.
Fairley, Stapp and Brown testified for the government during the trial.
Alhambra told jurors that all three testified that they were part of the conspiracy. Fairley said he joined in 2009 when he went to a Boilermakers International Executive Council meeting in Paris and realized that the travel expense was not for union benefit, she said.
Brown testified that he knew there was a conspiracy in 2013 when the union hired Kateryna Jones, Alhambra said. And Stapp said she knew in 2013 when the union paid for Newton Jones’ travel to Ukraine, hired Jones’ family members, made large vacation payouts to union members and put Jones’ and Creeden’s terminally ill friend on the payroll so he could get a salary and benefits even though he did no work.
“The Boilermakers union,” Alhambra said, “is actually the victim of the Jones Enterprise.”
