Four union leaders convicted in 15-year embezzlement scheme

A federal jury has convicted four former leaders of the International Brotherhood of Boilermakers, Iron Ship Builders, Forgers, and Helpers in connection with a 15-year scheme that prosecutors said involved no-show jobs, lavish travel, improper vacation payouts and an unauthorized $7 million loan to a union-affiliated bank.

Newton Jones, 72, of Chapel Hill, North Carolina, the union’s former president, his wife Kateryna Jones, 33, and former Secretary-Treasurer William Creeden, 78, of Kearney, Missouri, were convicted of violating the Racketeer Influenced and Corrupt Organizations Act, according to the Justice Department. Former Vice President Lawrence McManamon, 78, of Rocky River, Ohio, was convicted on embezzlement charges.

According to evidence presented at trial, the defendants, led by Newton Jones and Creeden, embezzled union funds through a variety of schemes over a 15-year period. Prosecutors said the conduct included more than $5 million in unnecessary luxury international travel, including executive meetings held for no apparent purpose at extravagant hotels in cities such as Paris and Rome.

Newton Jones hired his wife for a union position in which she performed little to no work, paying her nearly $1.8 million in salary over nine years, including two years during which she lived in Ukraine and was dating Jones, according to trial evidence. Prosecutors also said Jones and Creeden approved hundreds of thousands of dollars in salary and benefits for three of Jones’ family members, along with more than $100,000 in tuition, rent and relocation expenses.

The evidence also showed that Newton and Kateryna Jones embezzled more than $160,000 for date-night meals in their hometown of Chapel Hill, while Jones and Creeden authorized hundreds of thousands of dollars in improper vacation payouts and directed an unauthorized $7 million union loan to the Bank of Labor.

Jones and Creeden also used their executive positions in the Boilermakers Union to obtain high-level positions at the Bank of Labor, where the union is the majority shareholder. The two men received nearly $4 million in salary and $1.4 million in retirement benefits from the bank while also drawing full-time union salaries, according to prosecutors.

“Union dues must be handled with care and used for the benefit of the dues-paying members,” said Assistant Attorney General A. Tysen Duva. “Union leadership that steals from the American worker will face prosecution, conviction, and prison time.”

Sentencing is scheduled for Sept. 1. Creeden, Newton Jones and Kateryna Jones each face a maximum penalty of 20 years in prison. McManamon faces a maximum penalty of five years in prison on each count. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI and Department of Labor investigated the case.