Justice Department union corruption case ends in racketeering convictions

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Union corruption convictions

Highlights

Newton Jones, Kateryna Jones, William Creeden, and Lawrence McManamon were convicted of embezzlement and racketeering after a 15-year union dues fraud scheme.
The defendants embezzled over $5 million on international travel, nearly $2 million on no-show salaries, and more than $100,000 for Jones family expenses.
Newton Jones, Kateryna Jones, and Creeden each face up to 20 years in prison, reinforcing increased federal scrutiny of union financial controls and fiduciary duties.

Convictions cap 15-year union dues scheme

As reported by the U.S. Department of Justice, the case centers on former International Brotherhood of Boilermakers president Newton Jones, his wife Kateryna Jones, former secretary-treasurer William Creeden, and former vice president Lawrence McManamon. A federal jury convicted Newton Jones, Kateryna Jones, and Creeden of violating the Racketeer Influenced Corrupt Organization Act, while all four were convicted of embezzlement from the union through multiple spending and compensation schemes.

Prosecutors say the misconduct included elaborate foreign trips unrelated to union business, personal shopping and dining charged to the union, no-show jobs and inflated pay for family members, improper vacation payouts, unauthorized surveillance of union employees, theft from the union retirement plan, health care fraud, wire fraud, and a $7 million unlawful loan to a union-related bank. Trial evidence presented by the government says the defendants, led by Newton Jones and Creeden, embezzled more than $5 million on luxury international travel, nearly $2 million on salary and benefits for no-show jobs, and more than $100,000 on tuition, rent, and relocation expenses for Jones family members.

Evidence at trial also showed that Kateryna Jones received nearly $1.8 million in salary over nine years for a position in which she performed little to no work. Prosecutors said Newton and Kateryna Jones separately embezzled more than $160,000 for restaurant spending in Chapel Hill, while Newton Jones and Creeden drew nearly $500,000 a year each from the Bank of Labor while also being paid full-time by the union.

Sentencing exposure and labor oversight impact

The Justice Department says McManamon faces a maximum penalty of five years in prison on each count, while Newton Jones, Kateryna Jones, and Creeden each face a maximum penalty of 20 years in prison. A federal district court judge will determine the sentences after considering the U.S. Sentencing Guidelines and other statutory factors.

Federal officials say the verdict reinforces scrutiny of union financial controls and fiduciary duties, particularly where retirement, health, and dues funds are involved. The Department of Labor and the FBI investigated the case, and labor and law enforcement officials say the convictions send a warning that misuse of union member money for private benefit can trigger criminal prosecution and prison time.

In our previous update on the Federal Election Commission’s early-June agenda, we outlined how the week was dominated by new litigation filings and a lack of scheduled commission meetings. We also highlighted the inspector general’s internal controls and enterprise risk management review, underscoring the compliance and oversight focus alongside the ongoing court activity.

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