Local News

Two Of Phipps' Former Aides Indicted By Federal Grand Jury

Posted March 11, 2003 5:28 a.m. EST

— Two former aides of State Agriculture Commissioner Meg Scott Phipps were indicted for their roles during the 2000 election campaign.

Linda J. Saunders, 43, was charged with 17 counts, including extortion, conspiracy, mail fraud, wire fraud and money laundering, and Bobby McLamb, 42, was charged with two counts: extortion and conspiracy to commit mail and wire fraud.

U.S. Magistrate Judge William A. Webb read the charges against the pair in open court late Monday afternoon. U.S. Attorney Frank Whitney discussed the indictments at a news conference Tuesday morning.

"The Justice Department, The U.S. Attorney [General] Office, the FBI and the North Carolina State Bureau of Investigation are very serious about public corruption," he said.

Officials said a summons has been issued to McLamb and an arrest warrant has been issued to Saunders. Officials have not said whether Phipps or other individuals will face indictments.

"There is a continuing investigation and it would be inappropriate to talk about anything that may or may not happen," Whitney said.

Late Tuesday morning, Phipps released a statement reacting to the indictments. She said it's inappropriate for her to comment right now, because the investigation is ongoing. Phipps also said the department has cooperated fully throughout all phases of the investigation.

Saunders and McLamb, who joined Phipps' campaign after losing to her in the Democratic primary, are accused of conspiring to solicit money that they said would go toward retiring Phipps' campaign debt. The indictment said the money was diverted to help pay McLamb's debt.

The indictment said McLamb was trying to repay bank loans totaling $100,000. Phipps offered to help with repayment after he lost the Democratic primary election and gave his support to Phipps.

The indictment also said after Phipps was elected in 2000, Saunders told fair midway companies they would have to contribute to help Phipps repay debts to be considered for a contract for the 2002 fair.

An attorney for McLamb didn't return a telephone call seeking comment and numbers for Saunders in Raleigh and Louisburg weren't answered.

Saunders, who became Phipps' assistant when Phipps became commissioner, is accused of accepting two cashiers checks totaling $14,500 from unidentified donors who wanted to influence the awarding of the midway contact for the North Carolina State Fair, according to the charges. McLamb, 42, received a $20,000 check from someone seeking a vendor contract at the fair, the indictment said.

Saunders, 43, also allegedly concealed cash contributions and other diversions to keep the transactions from campaign finance reports.

According to the indictment, Saunders funneled $22,000 "through a complicated structure of financial transactions in order to avoid triggering the filing of a currency transaction report."

The counts against Saunders carry a maximum prison sentence of 175 years and fines totaling $5 million. McLamb faces maximum penalties of 25 years in prison and fines of $500,000. Whitney said neither defendant, if convicted, would get the maximum sentence.

The FBI and State Bureau of Investigation had been looking into the financing of Phipps' 2000 campaign and awarding of the midway contract since a State Board of Elections hearing in June.

The board ruled that Phipps' campaign had taken $84,202 in cash from donors it could not identify and more than $14,000 in illegal corporate contributions. The campaign was fined $130,000.

The elections board also found that the Phipps campaign illegally paid more than $64,000 to help retire McLamb's campaign debt. He later became an assistant commissioner but was fired in early 2002.

Investigators also looked into the awarding of the midway contract for last year's State Fair to Amusements of America, a New Jersey carnival company. Phipps first met Amusements of America officials at the Ohio State Fair in August 2000, three months before she won her election.

The indictment said Amusements of America loaned $75,000 to Norman Chambliss, owner of the Rocky Mount Fair, who loaned the money to McLamb. One bank loan taken by McLamb was used to repay Chambliss, who forwarded the money to Amusements of America, the indictment said.

Phipps, 47, is the daughter of former Gov. Bob Scott and granddaughter of Kerr Scott, who served as governor and U.S. senator.