Sentencing looms for ex-auditor Jeff McMahan

BY TONY THORNTON

Published: November 7, 2008

MUSKOGEE — Jeff McMahan’s defense attorney continues to proclaim his client’s innocence, telling a federal judge Thursday that McMahan is "incapable” of the corruption charges for which a jury convicted him.

A federal prosecutor said the former state auditor and inspector is either arrogant or in denial.

The attorneys spoke during a 30-minute hearing at which McMahan and his wife were expected to be sentenced on three felony counts. Instead, U.S. District Judge James H. Payne said he needs more time to study the legal ramifications of a recent appeals court case in which a defendant received a sentence far below federal guidelines.

Sentences called for

Sentencing guidelines recommend eight to 10 years in prison for McMahan, 48, and six to eight years for Lori McMahan, 43. Jeff McMahan’s attorney, Rand C. Eddy, urged Payne to impose probation and house arrest. Lori McMahan’s attorney, Kevin Krahl, declined to suggest a specific sentence.

Assistant U.S. Attorney Gay Guthrie told Payne there was no evidence for a reduced sentence.

A jury convicted the McMahans in June on three of eight felony counts involving their association with Steve Phipps. Phipps co-owned several abstract companies that were regulated by the state auditor’s office.

Jurors heard testimony that Phipps provided more than $100,000 illegally to Jeff McMahan’s 2002 campaign. Phipps said he later paid the McMahans’ expenses for three trips, including the 2004 Democratic National Convention in Boston, and that he bought Lori McMahan expensive jewelry.

Prosecutors allege that in return, the state auditor, with his wife’s help, provided favors for Phipps’ abstract companies.

Jurors found the couple guilty on a conspiracy count and two counts of violating the Travel Act.