An Ohio union executive is among four people convicted in a sprawling corruption scheme that prosecutors say siphoned millions of dollars from hardworking union members through luxury travel, no-show jobs, fraudulent payouts, and unauthorized loans.
A federal jury has convicted Rocky River, Ohio resident Lawrence McManamon and three former leaders of the International Brotherhood of Boilermakers in what prosecutors described as a 15-year scheme to steal union funds and enrich themselves at the expense of rank-and-file workers.
McManamon, 78, a former International Vice President of the Boilermakers Union, was convicted alongside former union president Newton Jones, 72, of North Carolina; Jones’ wife, Kateryna Jones, 33; and former union Secretary-Treasurer William Creeden, 78, of Missouri.
Key Points
• Ohio’s Lawrence McManamon convicted in federal union corruption case
• Prosecutors say defendants stole millions from union members over 15 years
• Scheme included luxury international travel, no-show jobs, unauthorized loans, and fraudulent payouts
Federal prosecutors said the defendants treated union dues like a personal bank account, spending millions of dollars on lavish trips, expensive meals, unauthorized compensation, and financial arrangements that benefited themselves rather than union members.
“The Boilermakers Union members were supposed to get representation out of their hard-earned money used to pay union dues,” said Assistant Attorney General A. Tysen Duva.
“What they got instead is their money wasted on lavish trips and dinners, and unearned vacation payouts for the union leadership.” Duva added, “Union leadership that steals from the American worker will face prosecution, conviction, and prison time.”
Ohio official convicted in union spending scheme
McManamon, who lives in Rocky River on Cleveland’s west side, was convicted of embezzlement from the union.
Prosecutors said he participated in unauthorized spending that included extravagant foreign travel funded by union members and the use of union money for unauthorized surveillance of union employees.
According to trial evidence, union funds were spent monitoring employees in an effort to defend Newton Jones and McManamon against internal union complaints.
McManamon faces a maximum sentence of five years in federal prison on each count when he is sentenced Sept. 1.
Millions spent on luxury travel
According to evidence presented at trial, more than $5 million in union funds was spent on luxury international travel.
Prosecutors said union executives held meetings at upscale destinations including Paris, France, and Rome, Italy, often with little apparent connection to legitimate union business.
Federal investigators described the trips as lavish excursions funded entirely by dues-paying members.
“The absolute hubris and entitlement with which these defendants stole from American workers is disgraceful,” said U.S. Attorney Ryan Kriegshauser.
“While union members were faithfully clocking-in and out of their jobs, these defendants thought they were unaccountable and were callously gallivanting on extravagant trips that spared no expense.”
No-show jobs, family payouts and lavish spending
The jury also heard evidence that nearly $2 million was paid to Kateryna Jones and others through no-show jobs.
According to prosecutors, Kateryna Jones collected nearly $1.8 million in salary over nine years while performing little to no actual work. Trial testimony showed she received two years of salary while living in Ukraine and dating Newton Jones.
Investigators also uncovered more than $100,000 in tuition, housing and relocation expenses paid for members of Newton Jones’ family using union funds.
The government further alleged that Newton and Kateryna Jones spent more than $160,000 of union money on restaurant bills in their hometown of Chapel Hill, North Carolina.
Unauthorized $7 million loan
One of the most significant allegations involved a $7 million loan made from union funds to the Bank of Labor.
According to prosecutors, Newton Jones and Creeden simultaneously held highly compensated positions at both the union and the bank, despite supposedly working full-time jobs at each organization.
Evidence showed the pair received nearly $4 million in salary and an additional $1.4 million in retirement benefits from the bank while also collecting full-time union salaries.
Federal prosecutors argued the loan directly benefited institutions and positions tied to Jones and Creeden while exposing union members’ money to unnecessary risk.
Fraud touched retirement and healthcare plans
Jurors also convicted defendants on charges involving health care fraud and theft connected to union benefit programs.
The government alleged that union officials improperly provided benefits to Kateryna Jones and misused retirement funds intended to benefit union workers and their families.
“By using union funds for their private benefit, the fraud committed by these defendants strikes at the very confidence union members place in their leaders to represent their interests,” said FBI Kansas City Special Agent in Charge Chris Omerod.
“The evidence presented in trial demonstrated an elaborate and willful deceit of the Boilermakers Union to fund the lavish lifestyle of their former leaders.”
Sentencing scheduled
Newton Jones, Kateryna Jones and Creeden were convicted of violating the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.
Those defendants face potential prison sentences of up to 20 years.
McManamon faces a maximum penalty of five years on each count for which he was convicted.
A federal judge will determine the final sentences after considering federal sentencing guidelines and other statutory factors.