Published: April 11, 2008 10:48 am      

A son, a loan and mortgage questions

The son of Francis Stipe says he has not yet started foreclosure proceedings on the home of former District 17 state Rep. Mike Mass because of a concern it might look like witness tampering.

However, he said he plans to start the foreclosure action soon.

Wayne Stipe, of McAlester, testified as a defense witness on Thursday during the trial of his father at the Eastern District of Oklahoma U.S. Courthouse in Muskogee.

Francis Stipe is facing trial on a federal indictment accusing him of conspiracy, mail fraud, witness tampering and illegal monetary transactions.

On the witness tampering charge, Francis Stipe is accused of buying the mortgage on Mass’ homestead in Higgins in 2007 in an attempt to intimidate Mass.

Mass has already pleaded guilty to a federal charge of mail fraud and is currently awaiting sentencing. He’s also cooperating with federal prosecutors, investigators and federal grand jurors who are conducting a probe of political corruption and related criminal activities in Oklahoma.

Under questioning by John Carwile, one of Francis Stipe’s defense attorneys, Wayne Stipe said he obtained the note on the Mass mortgage for his father in early 2007. He said he sent a letter to another bank with an interested buyer on March 6, 2007, showing the total payoff on the Mass property to be $110,618, which included interest and insurance costs.

“I was trying to expedite the collection of Francis’ first mortgage,” Wayne Stipe said, referring to the note his father had purchased on the Mass property.

“At this time, did you know Mike Mass was under investigation?” Carwile asked.

Wayne Stipe said he’d learned Mass was under investigation “for doing some things with Steve Phipps.”

“Was there any attempt on your part — I said on your part — any attempt to influence Mr. Mass’ testimony?” Carwile asked.

“No,” Wayne Stipe replied.

“Have you taken any action to collect on that note?” Carwile asked. “Have you made any attempt to demand payoff or foreclose on the mortgage?”

“No,” Wayne Stipe said.

“Why not take steps to foreclose?” Carwile asked.

Wayne Stipe said he advised his father against foreclosing on the Mass property.

“At that time, there had been a plea agreement with Mike Mass,” Wayne Stipe noted. “I told him (Francis Stipe) this transaction could be part of the investigation of that.”

However, Wayne Stipe said he plans to take steps to foreclose by “Probably next week.”

Wayne Stipe said he plans to start the foreclosure on the Mass property “when this trial is over.” He said it was a business matter and paying the mortgage was the responsibility of Mike and Suzanne Mass.

In other testimony, Wayne Stipe said he learned before his father bought the note that the First National Bank & Trust in McAlester planned to start foreclosure proceedings against the Mass property.

Wayne Stipe said he learned about the matter from Steve Covington, who Wayne Stipe identified as Gene Stipe’s business manager.

Federal prosecutors are currently trying to revoke the probation of Gene Stipe for allegedly continuing to associate with Covington after Gene Stipe’s probation officer ordered them to disassociate in 2005.

On cross examination, Assistant U.S. Attorney Gay Guthrie questioned Wayne Stipe about the Mass property.

“You yourself agreed that trying to foreclose now would be witness tampering?” Guthrie asked.

“Yes,” Wayne Stipe said.

He said he had advised his father to buy the note, partly because he didn’t want his uncle Gene to be sued, since Gene Stipe had previously signed as a guarantor of the second mortgage on the property — at the request of Mike and Suzanne Mass.

Regardless of how the Francis Stipe trials turns out, Guthrie noted that Wayne Stipe’s uncle, Gene Stipe, still faces a charge of witness tampering in regard to Francis and Gene Stipe’s alleged actions regarding the Mike Mass homestead.

“There’s a case pending against your uncle Eugene,” Guthrie said to Wayne Stipe, asking him if he wasn’t afraid starting foreclosure action against the Mass homestead might affect the witness tampering case that Gene Stipe still faces.

Wayne Stipe said he hadn’t thought about that.

Defense attorneys also called Roi Nelson, president of First National Bank & Trust in McAlester. Nelson said the bank sold the note on Mike Mass’ homestead in Higgins to Francis Stipe after Mass repeatedly missed payments on the property.

Another witness, Hartshorne grocer Warren Lindley, testified about receiving a phone call from Mass’ brother, David Mass, last year.

Lindley told defense attorney Warren Gotcher that David Mass asked him to come by his shop in Hartshorne so he could visit with him. When he arrived, Lindley said he was surprised to see Mike Mass there, along with another brother, Steve Mass, and Mike Mass’ son, Micah.

Lindley said Mike Mass said “I’m going to jail. I need some help.”

“He said Francis Stipe bought the mortgage on his house,” Lindley said.

Lindley testified he told Mass “I don’t know them well enough to talk to them about that.”

He said he told Mass he would “run it up the flagpole” — a reference to trying to find someone who did know the Stipes well enough to talk to them.

“He said ‘Warren, what I’ve got to say is probably going to help Gene Stipe more than anybody,” Lindley said.

Eventually, Mass’ message was relayed to one of Gene Stipe’s attorney’s Mike Burrage, who reported it to the U.S. attorney’s office.

On cross examination, Assistant U.S. Attorney Ryan Roberts asked Lindley what it had been like to see Mass that day — a man who believed he was going to jail and about to lose his home?

“I didn’t expect to be put in that position,” said Lindley, who thought he had simply been going to see his friend, David Mass.

In other action, defense witness Mike Stokes said he had worked handling finances for Indian Nation Entertainment — a company which handled and manufactured gaming machines and which belonged to Steve Phipps, of Kiowa.

Stokes said he made payments with money from the company to Mass, along with then-state legislators Randall Erwin and Jerry Hefner. Court documents alleged that INE had money funneled to it through the state legislature.

He said he eventually questioned the payments and ultimately refused to pay the legislators anything. He said he also quit working for Phipps after they had a disagreement.

Stokes also testified that Phipps offered to hire and pay for an attorney to represent him — but he said Phipps later added the condition that Phipps’ own lawyer must first approve whatever Stokes might tell investigators.

Stokes also testified that Erwin and Hefner refused to be paid through Indian Nation Entertainment by a check — but he said Mass had no problems taking a check for his payments.

Court documents allege the payments were actually kickbacks for funneling state funds through INE. Erwin and Hefner have not been charged or indicted.

Prosecutors had rested on Thursday and the defense began calling witnesses as the trial went into a fourth day.

During a break with the jury out of the courtroom, defense attorney Gotcher asked U.S. District Judge Ronald White to acquit Francis Stipe of the charges against him.

White heard legal arguments and said he would take count four — the illegal monetary transactions — under advisement. The charge revolves around a $48,000 kickback which Gene Stipe allegedly paid Mike Mass in 2002 for steering state money to benefit the National Pet Products dog food plant in McAlester.

Gotcher contended there had been absolutely no evidence that Francis Stipe had anything to do with the $48,000 paid to Mass or any evidence he knew why such a payment would made.

With jurors having today off, the trial is set to resume on Monday.

Contact James Beaty at jbeaty@mcalesternews.com