Two former presidents among 7 Boilermakers union employees indicted for embezzlement

Two former presidents and five current and former employees of the Kansas City-based International Brotherhood of Boilermakers have been indicted for their alleged roles in a 15-year, $20 million embezzlement scheme, the Justice Department announced Thursday.

The seven are charged with conspiracy to commit offenses under the Racketeer Influenced and Corrupt Organizations (RICO) Act. They also face charges of embezzlement, health care fraud, wire fraud and theft in connection with health care and retirement plans.

The grand jury indictments were returned Wednesday, and the case is filed in U.S. District Court for the District of Kansas. The union’s headquarters was in Kansas City, Kansas, for decades, but has recently moved to Kansas City.

“As alleged in the indictment, these defendants, including two former presidents of the Boilermakers Union, enriched themselves by spending millions of dollars in union funds for their own benefit, including for salary and benefits for no-show jobs, tuition, rent, luxury international travel, meals, vacation payouts, and unauthorized loans,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division.

“This indictment marks an important step in restoring financial security to the Boilermakers Union and control of the union’s future to its membership. The department is committed to protecting union members from officials who abuse their positions of authority for their own personal ends.”

The defendants are former union president Newton B. 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; former vice president Lawrence McManamon, 76, of Rocky River, Ohio; Newton Jones’ wife, Kateryna Jones, 32, of Chapel Hill; and Newton Jones’ son, Cullen Jones, 35, of Chapel Hill.

Stapp replaced Creeden as secretary-treasurer in August 2023. Fairley announced his retirement on Tuesday, effective immediately, according to a news release issued by the union. He was replaced by Timothy Simmons, one of the union’s five international vice presidents.

If convicted, the defendants face a maximum penalty of 20 years in prison on the RICO conspiracy count.

The charges allege that over 15 years, Jones and Creeden led the defendants in engaging in widespread embezzlement of Boilermakers union funds. That embezzlement, according to the charges, included:

— more than $5 million in unnecessary luxury international travel

— more than $2 million in salary and benefits to Kateryna and Cullen Jones for “no-show” jobs at which they did not work, including two years’ salary to Kateryna Jones when she lived in Ukraine and was dating Newton Jones

— hundreds of thousands of dollars for tuition, rent and relocation expenses for Newton Jones’ family members

— millions of dollars in cash payments in relation to vacation time that was fraudulently claimed

— hundreds of fraudulent restaurant expenses for Newton and Kateryna Jones in their hometown

— funds spent on email surveillance of union employees to defend Newton Jones and McManamon from internal union charges; and

— $7 million in unauthorized loans received from the Boilermakers Union MORE Fund that were executed by Newton Jones and Creeden to the union-owned Bank of Labor

Newton Jones and Creeden also were charged with wire fraud in connection to 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.

The indictment also seeks forfeiture of $20 million.

Concerns go back years

Many of the charges are for issues The Star revealed in a 2012 investigation, finding that Jones and other executives were living the good life. Jones’ salary and business expenses that year totaled more than $607,000, which put him above the presidents of the biggest unions in the country. The Star also found that several of Jones’ family members and relatives of other officers were earning hefty union salaries as well.

A follow-up story in 2017 found that little had changed. Six-figure salaries were still common for officers and their relatives, as were fine dining, stays in posh hotels and expensive hunting retreats. Cars were still being given as parting gifts for retired employees, and hundreds of thousands of dollars continued to be spent on promotional events and videos — all while membership continued its downward spiral and the union’s pension fund struggled to stay afloat.

Rank-and-file union members, who have long criticized Jones and other top officials for misspending their dues, welcomed the new indictments.

“This is a HUGE win for the members of our union,” said Darrell and Jessica Manroe, members of Local 83 in Kansas City, in an email. “We would like to send out a big thanks to the FBI, all that helped with this long, drawn-out investigation and the members who got involved with the rallies.

“This just goes to show if you play with fire, you’re going to get burned. Finally justice!”

The indictments come a little more than a year 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.

Jones, who had led the International Brotherhood of Boilermakers since his father retired in 2003, has denied any wrongdoing and said the executive council had no authority under the union’s constitution to dismiss him. After the August 2023 hearing, he told The Star that “I’ve done a lot of great things for this union” and said the allegations of financial malfeasance were “all bullshit.”

Jones’ attorney, Patrick McInerney, declined to comment on Thursday.

In May, 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.

At the time, Jones had not been charged with any crimes, but the actions described in Brown’s plea agreement made it clear that he was a focus of the federal investigation.

The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers was established in 1880 and is one of the nation’s oldest unions. It represents about 45,000 workers in the United States and Canada who assemble, install and repair boilers, fit pipes and build power plants and ships.

Treated as ‘personal piggy bank’

The FBI Kansas City Field Office and the U.S. Department of Labor are investigating the case.

Christiane Abendroth, of the Department of Labor’s Office of Labor-Management Standards, said the indictment “is a direct result of OLMS’s audit findings and a multi-agency criminal investigation.”

“We look forward to obtaining justice for the rank-and-file union members by removing officers who allegedly treated the union as their personal piggy bank,” she said.

Stephen A. Cyrus, special agent in charge of the FBI Kansas City Field Office, said union employees believed their executive would promote and protect their best interests.

“Instead, they allegedly utilized their positions for personal and financial gain,” Cyrus said. “By allegedly unlawfully misappropriating Union funds, the defendants betrayed their members’ trust and confidence. Anyone who unlawfully profits at the expense of others will be held accountable.”