United States v. McMahan

394 F. App'x 453
CourtCourt of Appeals for the Tenth Circuit
DecidedSeptember 2, 2010
Docket09-7007
StatusUnpublished
Cited by1 cases

This text of 394 F. App'x 453 (United States v. McMahan) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. McMahan, 394 F. App'x 453 (10th Cir. 2010).

Opinion

ORDER AND JUDGMENT **

MICHAEL R. MURPHY, Circuit Judge.

I. Introduction

Jeff McMahan, the former Oklahoma State Auditor and Inspector, was convicted of one count of conspiracy in violation of 18 U.S.C. § 371 (Count 1), and two counts of violating the Travel Act, 18 U.S.C. §§ 1952 and 2 (Counts 8 and 9). On appeal, McMahan argues: (1) the jury was improperly instructed on the elements of the charged Travel Act offenses and on the concept of deliberate ignorance; (2) his conviction of both the conspiracy offense and the Travel Act offenses resulted in constitutionally prohibited dual punishment; (3) the evidence was insufficient to support his convictions; (4) the district court improperly excluded evidence of his character; and (5) the district court abused its discretion in refusing to vary downward at sentencing. Exercising jurisdiction under 28 U.S.C. § 1291 and § 3742, this court AFFIRMS McMahan’s convictions and sentence.

II. Background

McMahan was elected Oklahoma State Auditor in November 2002, replacing Clifton Scott, who had occupied the position for twenty years. The Oklahoma State Auditor’s office took over the regulation of the abstract industry in 1984 during Scott’s tenure. Its jurisdiction continued until 2008, when the Oklahoma Legislature placed the industry under the control of an independent board. Okla. Stat. tit. 1, § 22. Scott and Steve Phipps, who owned several abstract companies, both supported McMahan’s candidacy. Phipps, in turn, was a close associate of former Oklahoma State Senator Gene Stipe; Phipps and Stipe had been business partners for over 30 years and owned several abstracting companies across Oklahoma, many of which they operated through a jointly owned holding company called Phipps Enterprises, Incorporated (“PEI”).

Phipps provided a total of $157,882 in financial assistance to McMahan’s 2002 campaign. He directed $27,000 in cash contributions to McMahan (much of which was funneled through McMahan’s wife), $77,600 in donations through straw donors, and $53,282 in-kind donations. The in-kind donations were in the form of radio jingles, campaign signs and crews, dinner theater bookings, and radio spots.

After prevailing in a close election, McMahan continued to accept gifts from Phipps. For example, in 2003 and 2004, Phipps paid for guided fishing trips to Lake Texoma for McMahan and his son. *456 Phipps also financed trips to New Orleans for McMahan and his wife in 2003 and 2004. During the New Orleans trips, Phipps bought a ring and matching pair of earrings for McMahan’s wife. In 2004, Phipps gave McMahan $6500 in cash he needed to travel to the Democratic National Convention in Boston and to sponsor a meal for the Oklahoma delegation in Boston.

In exchange for these gifts, Phipps periodically contacted McMahan for favors. For example, McMahan delayed an application by John Callaham to open an abstract company in Idabel, Oklahoma, that would have competed with one of Phipps’s businesses. According to Tim Arbaugh, the abstractor registrar who worked for both Scott and McMahan, McMahan’s “intent was to slow down the process of giving the permit ... to try to prevent that application from ever succeeding so that Mr. Phipps wouldn’t have a competitor.”

When Idabel’s state representative, Jerry Ellis, subsequently introduced legislation that would have effectively eliminated the abstracting industry in Oklahoma, Phipps contacted McMahan and Arbaugh to plan a response. After speaking with Phipps, McMahan told Arbaugh there were “two things that are of concern here. One of them is that this is being done from Steve Phipps’s area, and Steve is concerned that perhaps part of the reason for it is that Mr. Ellis is doing this to soften the ground for Mr. Callaham’s application to come back into play.” To appease Phipps, McMahan directed Arbaugh to “get directly involved with Mr. Ellis to try and satisfy him in whatever way necessary to remove the bill.” Arbaugh subsequently negotiated an agreement to change the pricing system and cap prices on abstracts prepared by Southern Abstract in Idabel, the only abstract company in Ellis’s district. Ellis, in turn, withdrew his legislation.

Phipps also called on McMahan when he needed help getting appropriations more directly from the state legislature to entities controlled by Phipps and Stipe. After Stipe pleaded guilty to charges of perjury, conspiracy to obstruct an FEC investigation, and conspiracy to violate the Federal Election Campaign Act, Phipps called McMahan to set up a meeting for him with the State Insurance Department to help him force Stipe to sell their jointly held abstracting business to Phipps. Phipps also met with McMahan and Arbaugh to secure a commitment from McMahan that he would pursue an administrative complaint against the entities jointly held by Phipps and Stipe to allow Phipps to force a favorable settlement with Stipe. 1 McMahan subsequently filed the complaint, even though he had been informed by his own counsel that his office had no authority to file a complaint. After the entities filed a motion to dismiss, Phipps again contacted McMahan to tell him that he wanted him to deny the motion to dismiss and send the matter to a hearing examiner so that Phipps could keep pressure on Stipe to liquidate their partnership.

In 2005, the FBI began investigating fraud allegations involving one of the entities owned by Phipps and Stipe, and the investigation eventually spread to their other businesses. Phipps and Arbaugh agreed to cooperate in the investigation, and, as a result, the investigation’s focus turned to others, including McMahan and his wife.

*457 In 2008, McMahan and his wife Lori McMahan were charged by indictment with one count of conspiracy in violation of 18 U.S.C. § 871 (Count 1); six counts of mail fraud in violation of 18 U.S.C. §§ 1341, 1346 and 2 (Counts 2 through 7); and two counts of violations of the Travel Act, 18 U.S.C. §§ 1952 and 2 (Counts 8 and 9).

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Related

McMahan v. United States
178 L. Ed. 2d 793 (Supreme Court, 2011)

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Bluebook (online)
394 F. App'x 453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-mcmahan-ca10-2010.