Former trade union presidents indicted in a $20 million embezzlement scheme

Two former presidents of a major trade union along with five others were indicted Wednesday for allegedly being involved in a $20 million embezzlement scheme.

Seven people total, including five current and former high-level officers of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers and Helpers (Boilermakers Union), were indicted by a federal grand jury in Kansas. 

They have been charged with offenses under the RICO Act, healthcare fraud and theft regarding retirement and healthcare plans, according to the Department of Justice.

This scheme has allegedly been ongoing for 15 years. 

The defendants are former union presidents Newton Jones, 71, and Truman “Warren” Fairley, 59. Others indicted had or maintained high level positions at the union. 

“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,” U.S. Attorney Kate E. Brubacher for the District of Kansas said. “The Department of Justice is deeply concerned whenever there are accusations of fraud and misappropriation of union funds.”

Special Agent in Charge Stephen A. Cyrus of the FBI Kansas City Field Office added, "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.”

Among the embezzlement charges alleged in the indictment are:

• Over $5 million in unnecessary luxury international travel;
• Over $2 million in salary and benefits to Kateryna Jones and Cullen Jones for no-show jobs;
• Millions of dollars in cash payments relating to fraudulently claimed vacation time.