Follow the money: Stipe, Phipps business details raise questions

By James Beaty

A court-appointed receiver in the lawsuit between former District 7 state Sen. Gene Stipe and his estranged business partner, Steve Phipps, has demanded that National Pet Products pay $310,000 in delinquent accounts to Phipps Enterprises, Inc.

“The deadline for a response has passed and lawsuits are being prepared to recover such substantial funds,” receiver Kraettli Q. Epperson said in documents filed at the Pittsburg County Courthouse.

National Pet Products is the dog food plant on the north side of McAlester built on property sold by Stipe, according to court documents and other records.

In his report, Epperson said Phipps Enterprises Inc. also owes a substantial amount of taxes.

Phipps Enterprises, Inc., is identified in court documents as the company owned by Stipe, of McAlester, and Phipps, who is from the Kiowa area.

Stipe filed a lawsuit in Pittsburg County District Court in 2005 seeking to dissolve the business partnership, alleging that Phipps had been embezzling money.

Phipps soon counter-sued and the case has since been wending its way through the court system.

Federal affidavits and search warrants filed by the FBI have alleged that Phipps Enterprises improperly received a substantial amount of state tax money.

Now, Phipps Enterprises and six abstract companies held by the two are facing tax problems, according to Epperson.

Before appointment of the receiver, “Extensions has apparently been requested to delay filing the federal income tax return for Phipps Enterprises, Inc. for the tax year ending Sept. 30, 2006, until June 15, 2007,” Epperson said in a financial report filed at the courthouse.

“These returns were filed on June, 15, 2007; however, no payments were made thereby creating an unpaid federal tax liability of $83,361 and an unpaid state tax liability of $16,392,” Epperson said in court documents.

“As of June 15, 2007, Phipps Enterprises, Inc. did not have sufficient funds on hand to pay these tax liabilities,” Epperson said.

Also prior to Epperson becoming receiver, extensions had apparently been requested to file the consolidated federal income tax return for the Idabel abstract Co. and five subsidiaries for the tax year ending Dec. 312, 2006, until Sept. 17, 2007, according to the financial report.

“Initial analysis indicates there will be a significant federal and state income tax liability associated with these returns,” Epperson said.

“Based upon the May 2007 profit and loss statements for the Idabel Abstract Co. and the five operating companies, it is uncertain whether these companies will have the ability to pay these income tax liabilities by Sept. 17, 2007,” Epperson said in his report.

Phipps has already pleaded guilty to a single count of mail fraud in Eastern District of Oklahoma U.S. Court

He is accused of committing mail fraud “in a scheme to deprive another of honest services.”

“The ‘another’ is a reference to citizens of the state of Oklahoma and the Eastern District of Oklahoma,” Eastern District of Oklahoma U.S. Attorney Sheldon Sperling said at the time.

Meanwhile, Stipe has been ordered to return to federal court on Aug. 28 for a hearing to determine whether he violated terms of a previous five-year probation.

Both Stipe and Phipps have allegedly been involved in a scheme which resulted in staw donars funneling campaign funds to District 2 U.S. Rep. Dan Boren, of Muskogee, according to allegations in federal documents.

As a result of the Pittsburg County District Court battles, Associate District Judge James Bland appointed Epperson as the receiver over Phipps Enterprises, Inc. in May. Epperson is charged with overseeing the company until the court battle is decided.

Epperson is also charged with recovering — by demand, compromise or through lawsuits — “any unreasonable payouts and distributions to any person.”

Epperson said in court documents the report covers financial information filed through May 31, 2007 — which goes up to the date that the companies’ bookkeeper has provided the information.

A narrative description continues through July 27 of last week.

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