Former State Senator Indicted

Friday, October 5th 2007, 11:24 am

By: News On 6

OKLAHOMA CITY (AP) -- Former state Sen. Gene Stipe and his brother, Francis Stipe, were indicted Friday by a federal grand jury in Muskogee on charges of mail fraud, witness tampering, conspiracy and money laundering. The McAlester businessmen were accused of taking part in a real estate scheme that cheated taxpayers. Part of the scheme, the indictment alleges, involved a $48,000 kickback to ex-state Rep. Mike Mass, who has pleaded guilty to mail fraud and is cooperating with the government.

Clark Brewster, Stipe's attorney, said the allegations stemmed from events in 2002 and are "entirely defensible."

"To me, it is just a further attempt to cash in on the name and identity of Senator Stipe for publicity rather than protection of the public," he said.

Sheldon Sperling, U.S. attorney, did not immediately return phone calls for comment.

The charges grew out of a real estate deal involving a pet food company. Steve Phipps, a former business partner Gene Stipe in the pet food project, was indicted earlier.

Gene Stipe, 80, is on probation until 2009 on a federal conviction linked to illegal contributions to the 1998 congressional campaign of former state Rep. Walt Roberts.

Stipe, who resigned in 2003 after 53 years in the Oklahoma Legislature, is fighting an attempt to revoke his probation and faces a hearing later this month.

According to the indictment, funds appropriated by the Legislature were steered through the McAlester Foundation to buy real estate owned by the former senator for the pet food company in McAlester.

The indictment said Francis Stipe signed a check for $191,609 that went to an abstract company. A portion of the money was used to buy property from Gene Stipe, the indictment alleges.

"The sale of the property would and did enable Eugene E. Stipe to recoup $50,000 provided to a failed congressional campaign," the indictment said.

The Stipes were accused of buying the mortgage on the home of Mass in an attempt to influence, delay or prevent his testimony in a federal investigation.

The indictment said the defendants committed mail fraud by causing three checks totaling $1.9 million to be sent from the Oklahoma Department of Agriculture to the Kiamichi Economic Development Authority in Wilburton.

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