MUSKOGEE, OKLAHOMA - Sheldon J. Sperling, United States Attorney for the Eastern District of Oklahoma, announced that FRANCIS D. STIPE, age 77, of McAlester, Oklahoma, has pled guilty to all four counts of the indictment with which he was charged.
“The district court accepted the defendant’s pleas of guilty and found the defendant guilty,” U.S. Attorney Sperling disclosed. “The defendant stands convicted of four felonies: conspiracy, honest public services mail fraud, attempting to intimidate a federal witness, and engaging in an illegal monetary transaction.”
“After 4 days of trial last week,” U.S. Attorney Sperling reported, “the jury heard closing arguments on Monday. We are grateful to jurors for their attention and their deliberations which began on Monday afternoon and continued Tuesday and Wednesday without reaching a verdict.”
“Our court rules and judges zealously guard juror privacy,” continued U.S. Attorney Sperling. “We share that commitment. A downside, however, is the absence of knowledge as to how they stand or what they think about the case generally and the evidence specifically. We must use our best judgment to discern where things stand. We believe the jury was unable to reach a unanimous verdict. That belief generated this resolution.”
“We have been honored by the integrity of investigators and prosecutors in this case. They didn’t exaggerate the evidence. Conventional cynicism suggests that corners may be cut, that admissions may be inflated. No one quoted the defendant as saying ‘I’m going to buy the Mass loan and dangle it over his head.’”
“The pleas and guilty verdicts entered by the court, involved complex issues of federal conspiracy law,” U.S. Attorney Sperling continued. “In this case, the defendant provided a comprehensive factual basis for the findings of guilt as to Counts I and III. As to Counts II and IV, federal prosecutors properly relied on well-established Supreme Court authority dating back to l946. In Pinkerton v. U.S., 328 U.S. 640, 647 (1946), our Highest Court ruled that a conspirator ‘can be held responsible for the substantive crimes committed by his co-conspirators to the extent those offenses were reasonably foreseeable consequences of acts furthering the unlawful agreement, even if he did not himself participate in the substantive crimes.’ In this case, the court had instructed the jury that a conspirator is responsible for the foreseeable acts of other conspirators – even if he did not participate in all the acts and may not even have known all the other conspirators. Consistent therewith, facts underlying this defendant’s guilt of Couts II and IV were presented to, and accepted as sufficient by, this Honorable Court.”
“Today, we reflect. The former chairman of the Oklahoma House Committee on Appropriations has been convicted of corruption and is awaiting sentencing. The former longtime business partner of a political icon has been brought to justice and is awaiting sentencing. Several temptations to public corruption have been taken off the table. The manner in which the abstracting business is supervised, has been dramatically changed. The means by which scarce and valuable public money is invested in Oklahoma’s economic future is subject to improved oversight. Retirement systems are subject to enhanced scrutiny. Public official ethics have been the focus of intense examination. This defendant has been convicted, as charged. The sunlight of prosecution is a powerful disinfectant. And tomorrow, we continue our work.”
“On October 5, 2007, FRANCIS STIPE, and his brother, EUGENE E. STIPE, were indicted for Conspiracy to Commit Honest Services Mail Fraud, Tamper with a Witness, and Engage in an Illegal Monetary Transactions,” U.S. Attorney Sperling stated. “Counts 2-4 further alleged that the defendant aided and abetted the commission of specific substantive or underlying felonies: deprivation the public of honest services as effected by the use of the U.S. Mail, an attempt to tamper with a federal witness, and engaging in an illegal financial transaction.”
“Experienced prosecutors and agents worked diligently to gather, organize and present admissible evidence to this jury,” U.S. Attorney Sperling noted.” “Charges arose from an extensive investigation by the Federal Bureau of Investigation. The Internal Revenue Service/Criminal Investigation Division also played an integral role in this inquiry. Assistant United States Attorneys Robert Gay Guthrie and Ryan M. Roberts admirably represented the United States of America at trial.”
“The Honorable Ronald A. White, District Judge of the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the trial. After entering findings of the defendant’s guilt as to all counts of the indictment, Judge White ordered the completion of a presentence report. Pursuant to federal law, FRANCIS STIPE was released pending sentencing under conditions to be supervised by the United States Probation Office.”
“Count I of the Indictment charges that the defendants, EUGENE STIPE and FRANCIS STIPE, knowingly conspired with each other and with others, to commit Counts II and III of the Indictment - Mail Fraud and Tampering with a witness. Specifically, the Indictment states that the conspirators steered funds appropriated by the Legislature of the State of Oklahoma to an entity known as the McAlester Foundation (MF). MF used these funds to purchase real estate owned by EUGENE STIPE for a business known as National Pet Products (NPP).”
“The Indictment further states that the object of the conspiracy was to recoup $50,000.00 provided to a failed congressional campaign. The money was in the form of a loan by FRANCIS STIPE to an industrial credit corporation, which then provided the funds to Walt Roberts for use in his 1998 congressional campaign. The money was to be recovered from funds appropriated by the Legislature of the State of Oklahoma and used by MF to buy the real property from EUGENE STIPE.”
“The Indictment further charges that the defendants conspired to intimidate Michael D. Mass, in order to corruptly affect Mass’s testimony before a Federal Grand Jury and at subsequent trial, by purchasing the mortgage of his residence from a financial institution. The defendant admitted that on February 14, 2007, he bought the mortgage on Mass’ residence from a financial institution, which mortgage had previously been guaranteed by EUGENE STIPE. Mass is a former legislator who was in a position to allocate funds to state agencies including the Oklahoma Department of Commerce and the Oklahoma Department of Agriculture and to Councils of Government, including the Kiamichi Economic Development District of Oklahoma. Mass was also in a position to steer the funds from the state agencies and Councils of Government to the McAlester Foundation. Mass is a former chairman of the Oklahoma House Appropriations Committee.”
“Count II of the Indictment states that the defendants knowingly and intentionally devised a scheme and artifice to defraud another of the intangible right of honest services, by steering funds appropriated by the Legislature of the State of Oklahoma to the McAlester Foundation (MF) stated U.S. Attorney Sperling. EUGENE STIPE, and others, had a covert financial interest in NPP, which constituted a false and fraudulent pretense employed in the scheme. The funds steered to MF by Legislator Mass deprived others of Mass’s honest services. This payment of the funds was kept secret from the public and was, therefore, a false and fraudulent pretense employed in the scheme. The indictment further stated that EUGENE STIPE and FRANCIS STIPE both recouped their $50,000.00. The undisclosed repayment of the loan with funds appropriated by the Legislature of the State of Oklahoma through the sale of the property to the MF was another false and fraudulent pretence employed in the scheme. Three checks were sent through and delivered by the United States Postal Service for an amount totaling approximately $1,900,000.00. The checks were from the Oklahoma Department of Agriculture in Oklahoma City addressed to the Kiamichi Economic Development District of Oklahoma in Wilburton.”
“Count III of the Indictment charges that EUGENE STIPE and FRANCIS STIPE attempted to intimidate Michael D. Mass, and did so by purchasing Mass’s residential mortgage from a financial institution for the purposes of influencing, delaying or preventing his testimony before a Federal Grand Jury investigation and subsequent trial in the United States District Court for the Eastern District of Oklahoma.”
“Count IV of the Indictment charges that the defendants engaged in a monetary transaction through and to a financial institution, affecting interstate commerce, in criminally derived property of a value greater than $10,000.00. Specifically, a check was made payable to Michael D. Mass in the amount of $48,000.00 as a kickback for steering funds from the Legislature of the State of Oklahoma, and then negotiated.”
