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FOR IMMEDIATE RELEASE:

Monday - November 10, 2003

GREENVILLE - United States Attorney Frank D. Whitney announced that MEG SCOTT PHIPPS, 47, of Haw River, N. C., pled guilty in federal court in Greenville on Monday, November 10, 2003, pursuant to a plea agreement. U. S. District Judge Malcolm J. Howard accepted PHIPPS' plea of guilty to one count of conspiracy to commit offenses against the United States (Count One); two counts of using the mails in a scheme and artifice to deprive the State of North Carolina and its citizens of the right of honest services (Counts Four and Five); and two counts of extortion under color of official right (Counts 21 and 26).

Counts Four and Five are based on the "honest services" section of the federal mail fraud statute, enacted by Congress in 1988. Under this provision, a public official is guilty if the mails are used in any way in a fraudulent scheme to deprive the public of honest services free of improper influence or corruption. Counts 21 and 26 are based on the "Hobbs Act," which makes it illegal for a public official to use her position to obtain property from someone for or because of officials acts. Count 21 arises from one of the large cash contributions that Jimmie Drew, III, of Drew Expositions, personally handed to Phipps in the Spring of 2002. Drew's company had the midway contract for the Mountain State Fair near Asheville, and later obtained a contract to construct cable lift rides at that fair and the State Fair in Raleigh. Count 26 arises from the $2,000.00 that a fair food concessionaire handed to Phipps at the 2001 State Fair in Raleigh.

For each of Counts One, Four, and Five,PHIPPS faces a maximum sentence of five years imprisonment, a fine of $250,000.00, and a supervised release term of three years. The maximum sentence for each of Counts 21 and 26 is 20 years imprisonment, a fine of $250,000.00, and a supervised release term of three years. The actual sentence will be imposed by the Court in accordance with the United States Sentencing Guidelines. Under the terms of the plea agreement,PHIPPS also will forfeit to the United States $25,000.00. A sentencing date has been tentatively set for March 1, 2004, in Greenville.

PHIPPS was indicted by a federal grand jury in Raleigh on September 4, 2003, on 28 various charges related to the investigation of the Meg Scott Phipps Campaign 2000 for Commissioner of Agriculture, and subsequent events during her tenure in that position. A 30-count superseding indictment (which added two counts) was filed on October 2, 2003.

Three other defendants charged in the investigation, Bobby C. McLamb, Linda Johnson Saunders, and Michael Eugene Blanton, pled guilty previously and are awaiting sentencing.

The investigation in this case has been ongoing for approximately 16 months and has been conducted jointly by the Federal Bureau of Investigation and the North Carolina State Bureau of Investigation, in conjunction with the United States Attorney's Office and the Office of Wake County District Attorney C. Colon Willoughby, Jr. The Public Integrity Section of the Criminal Division of the U. S. Department of Justice also played a role in the investigation. Assistant U. S. Attorney Dennis M. Duffy and Executive Assistant U. S. Attorney John Stuart Bruce are handling the case for the government.

U. S. Attorney Whitney stated, "Ms. Phipps' plea of guilty concludes a sad chapter in North Carolina history. Whenever a public official violates the trust of the people, serious consequences must follow. A core mission of the United States Attorney's Office is to investigate and prosecute corrupt public officials. We take this mission seriously, and the public can rest assured that we will leave no stone unturned investigating credible allegations of corruption."


News releases are available on the U. S. Attorney's web page at www.usdoj.gov/usao/nce within 48 hours of release.

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