Feds sue Gene Stipe over insurance dealings
Feds sue Gene Stipe over insurance dealings
By Tony Thornton
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Published: August 4, 2008
MUSKOGEE — Federal prosecutors today sued former state Sen. Gene Stipe, accusing him of illegally participating in the insurance business as a convicted felon.
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The lawsuit alleges Stipe's companies engaged in the insurance trade for 19 months after he was sentenced in a campaign fraud scandal.
Each violation carries a possible $50,000 fine. The two-page lawsuit doesn't say how many insurance transactions are involved, nor how much his potential liability might be.
"My preliminary view, a lot," U.S. Attorney Sheldon Sperling said of Stipe's potential exposure. "It could be a large number."
The filing could indicate prosecutors have resolved themselves to the idea that Stipe will never serve prison time on either a probation revocation case or a new criminal indictment, both of which were filed last year.
Stipe is in a federal prison hospital in Missouri, undergoing mental competency testing in the probation violation matter. A prison psychiatrist originally reported last found that Stipe was incompetent from recurrent swelling of the brain. A federal judge agreed, prompting Stipe's return to the prison hospital in May for up to four months of treatment.
For more than two decades, Stipe was a secret owner in several abstract companies involving front man Steve Phipps.
Phipps testified at two recent trials that Stipe wanted his ownership private because it might be illegal for him as a senator to vote on matters involving the industry.
Stipe also was co-owner of Corporate Finance Group, the parent company of American Land and Aircraft Title Co. in Oklahoma City. That company underwrote numerous title insurance policies sold by Stipe's abstract companies, prosecutors allege.
His ownership remained a secret until July 2005, when Stipe sued Phipps. He later asked the state Insurance Department to let him engage in the insurance business despite his felony conviction. His request was rejected.
The period covered by the lawsuit is Feb. 1, 2004, until Oct. 25, 2005, when Stipe said he had transferred his interest in Corporate Finance Group to an irrevocable trust to benefit his daughter and grandson.
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retirement pension! That's sickening!