Ousted Boilermakers president, wife and son plead not guilty in union embezzlement scheme

Former Boilermakers International President Newton Jones, his wife and son pleaded not guilty in federal court in Kansas City, Kansas, Tuesday to allegedly scheming to steal $20 million in union funds.

The three made their first appearances in the U.S. District Court for the District of Kansas before Magistrate Judge Teresa J. James.

“I know you’re all aware that this is a lengthy indictment, so there are a lot of charges,” James told the defendants as she began reading through the list of alleged felonies.

It took 23 minutes for her to cover all the counts.

Jones, 71; his wife, Kateryna Jones, 32; and son, Cullen Jones, 35, all of Chapel Hill, North Carolina, are among seven former union members — among them two presidents and three other top officers — indicted for conspiracy to commit offenses under the Racketeer Influenced and Corrupt Organizations (RICO) Act. They also face other charges, including embezzlement, health care fraud, wire fraud and theft in connection with health care and retirement plans.

A federal grand jury returned the 57-count indictment on Aug. 21 following an investigation by the FBI Kansas City Field Office and the U.S. Department of Labor. The union’s headquarters was in Kansas City, Kansas, for decades, but has relocated to Kansas City near the airport.

Those charged along with the three Joneses were former union Secretary-Treasurer William Creeden, 76, of Kearney, Missouri; former International President Truman “Warren” Fairley, 60, of Chapel Hill; former International Secretary-Treasurer Kathy Stapp, 53, of Shawnee; and former International Vice President Lawrence McManamon, 76, of Rocky River, Ohio.

Fairley, Creeden, McManamon and Stapp pleaded not guilty at a hearing on Friday. Their next court appearance is scheduled for Oct. 10, along with the Joneses.

The charges allege that over 15 years, Jones and Creeden led the defendants in engaging in widespread embezzlement of Boilermakers funds, enriching themselves by spending millions of union dollars for personal gain. The money allegedly went toward salary and benefits for jobs some didn’t show up for, tuition, rent, luxury international travel, meals, vacation payouts and unauthorized loans.

Jones and Creeden also were charged with wire fraud in connection with their alleged demand and acceptance of “no-show employment” with the Bank of Labor, the Justice Department said, for which they were paid more than $3.4 million each in salary and benefits.

No detention pending trial

As was the case last week with the other four defendants, the government did not seek detention Tuesday for the Joneses, and James released all three with conditions that included surrendering their passports and having no contact with victims, witnesses or their co-defendants.

James acknowledged that it would be unreasonable for the three of them to avoid contact with one another but warned them that they were prohibited from talking about the case among themselves.

James placed additional restrictions on Cullen Jones, including that he continue to seek employment, submit to random drug testing, consume no alcohol and possess no firearms or other weapons.

The indictment came nearly 15 months after the union’s executive council voted to oust Jones as international president, accusing him of misusing union funds for personal gain — including funneling large sums of money to his Ukrainian wife for work she never performed. That led to a monthslong court battle over who controlled the union.

In August 2023, a federal judge upheld the union executives’ June 2 decision to remove Jones as president and replace him with Fairley, who had recently retired as an international vice president.

Fairley announced his retirement as international president on Aug. 20, effective immediately, and was replaced by Timothy Simmons, one of the union’s five international vice presidents. Stapp, the union’s former human resources director who replaced Creeden when he retired as international secretary-treasurer last year, resigned on Aug. 25.

Newton Jones is charged with one count of racketeering conspiracy; 47 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 three counts of theft from an ERISA (Employee Retirement Income Security Act) program.

Kateryna Jones faces one count of racketeering conspiracy; 10 counts of embezzlement from a labor organization; one count of health care fraud conspiracy; and one count of theft in connection with health care.

Cullen Jones is charged with one count of racketeering conspiracy; two counts of embezzlement from a labor organization; one count of health care fraud conspiracy; and one count of theft in connection with health care.

If convicted, the defendants face a maximum penalty of 20 years in prison, three years of supervised release and a $250,000 fine on the RICO conspiracy count. Federal law also says that if any person derived financial gain or loss because of the offense, the defendant may be fined twice the amount of that gain or loss.

The other charges carry maximum penalties of five to 20 years and maximum fines of $10,000 to $250,000.

In May, another former union official, Tyler Brown, pleaded guilty to one count of racketeering conspiracy in the U.S. District Court for the District of Kansas. 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 scheduled for November.