Former Palmetto Railways CEO pleads guilty in fraud case

CHARLESTON, S.C. (WCBD) – The former CEO of Palmetto Railways could face up to five years in federal prison after pleading guilty to conspiracy to commit honest services fraud.

The case, investigated by the FBI Columbia Field Office, involved Jeffery McWhorter, 63, of Awendaw, a co-conspirator referred to as T.B., and an unnamed employee of a Texas-based company.

The U.S. Attorney’s Office for the District of South Carolina said evidence obtained during the investigation revealed that McWhorter – who was the president and CEO of Palmetto Railways – introduced his co-conspirator who believed he would be awarded a contract for work in the Charleston area by the Texas company.

Before that contract was awarded to the Texas company, McWhorter, T.B., and the unnamed employee (Employee 1), held meetings and discussions about T.B. paying McWhorter and the employee if his company was given the contract.

“McWhorter and his known coconspirators further agreed that T.B. would send money to Employee 1, and evidence revealed that TB did in fact wire the money to a bank account was in Employee 1’s wife’s business name. The agreement was that Employee 1 would then pay McWhorter his portion in cash,” the US Attorney’s Office wrote in a news release.

T.B. ultimately wired roughly $400,000 to the employee in Texas, and McWhorter received at least $90,000 of that in cash.

Evidence revealed that throughout the course of the conspiracy, McWhorter and the employee’s payment caused – or could have caused – economic harm to the Texas company.

McWhorter faces a maximum penalty of five years in federal prison and a fine of up to $250,000, restitution, and three years of supervision to follow the terms of imprisonment.

U.S. District Judge David Norton accepted McWhorter’s guilty plea. He will be sentenced after receiving and reviewing a report from the U.S. Probation Office.