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Mike Mass pleads guilty

JAMES GIBBARD / Tulsa World
Former state Rep. Mike Mass leaves the federal courthouse in Muskogee on Friday after pleading guilty to a federal conspiracy charge.

   


By SUSAN HYLTON World Staff Writer
4/14/2007


He admits to fraud scheme for public money


MUSKOGEE -- Former longtime House Democrat Mike Mass pleaded guilty Friday to a mail fraud scheme that enabled him to pocket an estimated $250,000 in public money.

Standing before Magistrate Judge Kimberly West in U.S. District Court, Mass, 55, waived his rights to indictment by grand jury and read aloud the charge against him.

Mass said he was guilty of steering state funds to the Rural Development Foundation, which provided funds to a pet food company and an Indian gaming machine maker.

Asked by the judge if the mailing of a $250,000 check was with the intent to obtain money under false pretences, Mass quietly responded, "Yes."

Mass and his attorney, Randy Lynn, had no comment after the proceedings.

"This is a personal and state institutional tragedy for the defendant, the state Legisla ture and others," U.S. Attorney Sheldon Sperling said in a statement.

The maximum penalty is five years imprisonment and / or a $250,000 fine. But Sperling said Mass has pledged to assist prosecutors in the ongoing investigation, which could result in a lesser sentence.

"We don't hammer people who help us," Sperling said during a news conference after Friday's hearing.

It could take 90 to 120 days before Mass is sentenced, or longer, depending on the investigation, Sperling said.

Until then, Mass is under the supervision of a pre-sentencing probation officer. Before Mass left the courthouse, he was required to sign a $20,000 unsecured bond.

Two former lawmakers and an unnamed businessman allegedly were part of the con spiracy, but Sperling said he was not at liberty to confirm whether they were cooperating in the investigation and would not say how many more people could be charged. But he indicated the case will be significant.

"If you're building a foundation, you build it one brick at a time," Sperling said. "This is a big brick."

Under the conditions for Mass's release, he is forbidden to speak to any potential victims or witnesses in the case, leave the eastern U.S. judicial district of Oklahoma -- comprised of 26 counties in the eastern and southeastern areas of the state -- or abuse alcohol or drugs.

An additional requirement that is not always standard is that Mass is to refrain from frequenting Indian casinos or gambling halls, Sperling said.

Records show that Mass and the legislators were listed as investors with Indian Nations Entertainment Corp., even though they never invested any of their own funds with the gaming machine maker that received state funding.

FBI affidavits tie former state Sen. Gene Stipe and his estranged business partner Steven Phipps to kickback payments to Mass.

Phipps agreed to give Mass and former Democrat state Reps. Jerry Hefner and Randall Erwin 10 percent of the income earned on INE gaming machines in exchange for earmarking funds -- $2,273,581 -- to the Rural Development Foundation, according to FBI affidavits.

Neither Hefner nor Erwin has been charged.

Phipps created INE and the RDF, which was purported to be a charitable organization.

Records show that Mass lost $10,000 in cash at the Choctaw Casino in 2005, according to information in a Chapter 7 bankruptcy he filed in October 2005 in U.S. Bankruptcy Court.

Mass was appointed an attorney because he didn't have sufficient funds to furnish his own.

"I think it's in the wind," Sperling said of where Mass' money went. "If it (any significant assets owned by Mass) were something I could grab, I'd be showing it off."

Stipe's brother Francis Stipe testified in a civil trial last month in Pittsburg County District Court that he purchased Mass' home mortgage "to make some money."

Mass' bankruptcy filing lists his assets and debt between $100,001 and $500,000, and owing 16 to 49 creditors, records show.

His Hartshorne home is listed with a market value of $120,000 and a couple of surface lots were valued at $15,000.

His income sources were also identified in court records. Some, not all, of those sources correlate with information in an FBI affidavit that alleges he accepted kickbacks.

The bankruptcy case was closed in February 2006, then reopened in November 2006 for the administration of assets.

Mass left the Legislature in 2006 because of term limits. He served from 1991 to 2002 and from 2003-05. He lost a bid for Congress in 2002.

Mass is a former chairman of the House Appropriations Committee and a Democratic party chairman.

Three years ago, Mass apologized to the state House for his involvement as a "straw donor" in the 1998 congressional campaign of Walt Roberts.

Stipe was sentenced to five years probation and $735,000 in fines after pleading guilty to illegally funneling $245,189 to Roberts' campaign.


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Susan Hylton 581-8381
susan.hylton@tulsaworld.com


By SUSAN HYLTON World Staff Writer

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(6) readers have commented on this story so far. Tell us what you think below!


1. 4/14/2007 7:39:03 AM, RICK SLANKARD, SAND SPRINGS
WHY ISN'T GENE STIPE IN PRISON. HOW MUCH CRIME DOES HE GET TO GET BY WITH BEFORE HE IS JAILED. HOW MUCH MORE MONEY DOES THE STATE OF OKLAHOMA AND THE TAX PAYERS SPEND ON THIS CRIMINAL. STIPE AND MASS AND ANY OTHER POLITICIAN SHOULD NOT BE ABOVE THE LAW.
2. 4/14/2007 8:24:19 AM, Allen Wally,
Bear in mind that anytime a Democrat has been busted in the last 10 years or so, it has always been an FBI operation. Stipe would have retired with dignity if Edmondson would have been at the helm. Brent Van Meter would be the Director of the Health Department. Compare that to Edmondson's handlimg of the Reinhart case in OKC.
3. 4/14/2007 9:02:28 AM, Allen Wally,
Bear in mind that anytime a Democrat has been busted in the last 10 years or so, it has always been an FBI operation. Stipe would have retired with dignity if Edmondson would have been at the helm. Brent Van Meter would be the Director of the Health Department. Compare that to Edmondson's handlimg of the Reinhart case in OKC.
4. 4/14/2007 9:41:42 AM, Ralph, Tulsa
This should be only the begining. When can we see Jeff McMahan being arrested? When is the connection to Gov. Henry going to be revealed?
5. 4/14/2007 10:05:35 AM, Randy, Tulsa
This is just a product of "one party", absolute rule. No accountability will lead to corruption in most cases. Hopefully, there can be a large sweeping clean out motion that will flush most of the criminals out, and both parties will be better for it, not to mention the state.
6. 4/14/2007 11:35:53 AM, Joseph, Tulsa
I just moved back to Oklahoma after an absence of 15+ years. I was shocked and amused to see that Gene Stipe was still up to his same old, tired tricks. Guess the voters are still getting exactly the government they deserve.

[guido911]

Damned culture of corruption...