Aug. 23 (UPI) — Two former Boilermakers Union presidents are among seven former and current union officials indicted Thursday for an alleged 15 year scheme to embezzle $20 million from the union.
The Justice Department said a federal grand jury in Kansas indicted former union presidents Newton Jones, 71, of Chapel Hill, N.C., and Truman “Warren” Fairley, 59, of Chapel Hill along with five others.
“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,” DOJ Criminal Division head Nicole M. Argentieri said in a statement.
According to the indictment, the conspiracy to steal money from the union was led over the course of 15 years by former Boilermakers Union president Newton Jones and former secretary-treasurer William Creeden.
Charged were former union president Newton Jones, 71, of Chapel Hill, N.C.; former president Truman “Warren” Fairley, 59, of Chapel Hill; former secretary-treasurer William Creeden, 76, of Kearney, Mo.; former vice president Lawrence McManamon, 76, of Rocky River, Ohio; Kateryna Jones, 32, of Chapel Hill; and Cullen Jones 35, of Chapel Hill.
They face charges of conspiracy to commit offenses under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
They’re also charged with embezzlement, health care fraud, wire fraud, and theft in connection with health care and retirement plans.
They allegedly stole the money from the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers and Helpers.
The DOJ said over $5 million of embezzled union money was spent on unnecessary foreign travel and more than $2 million in salary and benefits for no-show jobs for Kateryna Jones and Cullen Jones.
The DOJ said $7 million in unauthorized loans from the Boilermakers MORE Fund were “executed by Newton Jones and Creeden to the Bank of Labor.”
Newton Jones and Creeden were also charged with wire fraud for their alleged demand and acceptance of over $3.4 million each in salary and benefits for no-show jobs with the Bank of Labor.
Millions of dollars in cash payments went to fraudulently claimed vacation time, according to the DOJ.
Kansas U.S. Attorney Kate E. Brubacher said in a statement, “Union members pay their dues believing union leaders will use the money in support of the organization’s mission to advocate for and protect employment rights. The Department of Justice is deeply concerned whenever there are accusations of fraud and misappropriation of union funds.”
The defendants face 20 years in prison if convicted on the RICO conspiracy count.