Summary
A federal jury has convicted Newton Jones, William Creeden, Kateryna Jones, and Lawrence McManamon of the International Brotherhood of Boilermakers, Iron Ship Builders, Forgers, and Helpers in a case involving racketeering, fraud, and embezzlement of union dues. Prosecutors said union funds were improperly used for luxury travel, no-show jobs, personal expenses, unauthorized loans, and other benefits over a period of about 15 years.
Allegations presented at trial
- Luxury international trips paid with union funds
- Personal dining and shopping expenses charged to the union
- No-show jobs and unearned salaries
- Improper vacation payouts
- Unauthorized surveillance of union employees
- Unauthorized $7 million loan involving a union-linked bank
- Health care fraud and wire fraud allegationsFraud division announces federal–state partnership in ohio to prosecute fraud — DOJ
Jury convicts former union officials in long-running corruption case
A federal jury has found former Boilermakers Union President Newton Jones, his wife Kateryna Jones, former Secretary Treasurer William Creeden, and former Vice President Lawrence McManamon guilty in a case involving the misuse of union funds.
According to evidence presented during the trial, the scheme lasted for about 15 years and involved the improper use of money collected from union members through dues payments.
Newton Jones, Kateryna Jones, and William Creeden were convicted of violating federal racketeering laws. All four defendants were also convicted on embezzlement-related charges tied to the use of union funds.
Federal prosecutors argued that union members paid dues expecting the money to support representation and union operations. Instead, investigators alleged that large amounts of money were spent on activities that primarily benefited union leaders and their associates.
The case was investigated by the FBI and the U.S. Department of Labor.
Millions of dollars spent on travel, salaries, and personal benefits
One of the largest areas examined during the trial was international travel spending.
Prosecutors said more than $5 million in union funds was spent on luxury foreign travel. Evidence showed that executive meetings were held in expensive hotels in destinations such as Paris, France, and Rome, Italy.
The government argued that many of these trips were unnecessary and provided little benefit to ordinary union members.
Investigators also focused on employment arrangements that prosecutors described as no-show jobs. According to trial evidence, nearly $2 million in salary and benefits was paid to Kateryna Jones and others for positions requiring little or no work.
Prosecutors stated that Kateryna Jones received nearly $1.8 million in salary over nine years. Evidence presented at trial indicated that she received two years of salary during a period when she was living in Ukraine and dating Newton Jones.
The jury also heard evidence regarding payments made to members of Newton Jones’ family. Prosecutors alleged that hundreds of thousands of dollars were spent on salaries, benefits, tuition, rent, and relocation expenses.
Additional allegations involved improper vacation payouts worth hundreds of thousands of dollars.
According to prosecutors, Newton Jones and Kateryna Jones also used union funds for personal dining expenses, including more than $160,000 spent on restaurant meals in their hometown of Chapel Hill, North Carolina.
Fraudulent trust tax returns led to $1.1 million refund scheme
Another major issue in the trial involved a $7 million loan from the union to the Bank of Labor, where Newton Jones and William Creeden were employed. Prosecutors argued that the loan was unauthorized and created a conflict of interest because both men held senior positions at the bank while also receiving salaries from the union.
Court evidence showed that Newton Jones and William Creeden received nearly $4 million in salary and about $1.4 million in retirement benefits from the bank. Prosecutors also accused the defendants of using union funds for unauthorized surveillance of union employees, allegedly to defend Newton Jones and Lawrence McManamon against internal union charges.
The jury further convicted certain defendants on health care fraud and wire fraud charges linked to unearned benefits, undisclosed payments, outside employment, and conflicts of interest.
Sentencing is scheduled for September 1. Lawrence McManamon faces a maximum of five years in prison on each count, while Newton Jones, Kateryna Jones, and William Creeden each face up to 20 years in prison. A federal judge will determine the final sentences.