Ex-Stipe Business Partner Pleads Guilty

Wednesday, June 27th 2007, 11:18 am

By: News On 6

MUSKOGEE, Okla. (AP) -- Steven Phipps, a former longtime business partner of ex-state Sen. Gene Stipe, pleaded guilty Wednesday to a mail fraud charge and admitted paying kickbacks to three state legislators. Phipps, 52, admitted paying the lawmakers, who have since left office, for their help in funneling taxpayer money to private businesses. He has been cooperating with federal prosecutors. The charge carries a maximum penalty of five years in prison.

Phipps, who was released on $20,000 bond by U.S. Magistrate Kimberly West, became the second person to plead guilty to a felony charge linked to alleged kickbacks to legislators.

To read the court document, click here.

Former Rep. Mike Mass pleaded guilty to a similar charge in April and also is cooperating with federal authorities.

"I agreed with Mike Mass and others on a plan to have state funds appropriated by the legislature and steered to an entity known as the Rural Development Foundation," Phipps said.

"The RDF then provided funds to National Pet Products and Indian Nation Entertainment, businesses then largely owned and operated by me.

"In order to secure state funding for RDF, that would then be provided to INE, I agreed to periodically pay Rep. Mike Mass and two other influential state legislators each a percentage of the gross income from the gaming machines that were manufactured as the result of the state funding."

He did not reveal the names of the other two legislators who got the kickbacks.

His attorney, Dan Webber, said the state money did go to economic development.

"This is not a case where taxpayer money ended up in some offshore bank account," he said. "Though obtained improperly, the state funds for National Pet Products and Indian Nation Entertainment were put to use by those companies and did help create manufacturing jobs in eastern Oklahoma."