FBI Found $125,000 In Cash In Phipps' Safe

A Federal Bureau of Investigation agent found $125,000 in cash in a safe owned by southeastern Oklahoma abstractor and businessman Steve Phipps last January, a federal court affidavit reveals.

The same 42-page affidavit, the contents of which were first reported by The Oklahoman, confirmed an FBI probe of Phipps, State Rep. Mike Mass and former State Reps. Jerry Hefner and Randall Erwin.

Special Agent Gary W. Graff reported that on January 26th, Special Agent James Dawson served a search warrant at Phipps' home in Kiowa and during the search, found a safe in the hallway coat closet of the main floor. He reported Dawson opened the safe and found $125,000 in cash.

"Phipps informed SA Dawson that the cash was income, and that Phipps had paid all relevant taxes. As the seizure of cash was not addressed in the affidavit supporting the search warrant, the cash was not seized and was left in the safe at the Phipps residence," Graff wrote.

A federal grand jury has been probing Phipps, who was an abstract company business partner of former State Senator Gene Stipe. The FBI affidavit says Phipps' Rural Development Foundation appears to have been a conduit through which state money routed to it by the three legislators flowed to other Phipps enterprises.

Phipps also has been tied to State Auditor & Inspector Jeff McMahan. Phipps and Stipe have been described as "fund-raising machines" for McMahan in his 2002 campaign. Stipe, his associates and Phipps and abstract company employees poured tens of thousands of dollars into McMahan's campaign in 2002, and abstractors have continued this election cycle, donating a huge part of McMahan's total donations. The auditor & inspector licenses and regulates abstractors.

Phipps, an associate who has been interviewed by the FBI confirmed to TMRO, often bragged about his personal friendship with McMahan. McMahan has confirmed to radio station KTOK that he has been interviewed by the FBI and said he is not under investigation himself.

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