A former CEO from the Lowcountry is facing potential prison time and significant fines after agreeing to a guilty plea in a federal fraud case.
CHARLESTON, S.C. (WCSC) — Jeffrey McWhorter, the former CEO of Palmetto Railways, could face up to five years in prison and fines up to $250,000 after pleading guilty to the felony charge of ‘Conspiracy to Commit Honest Services Fraud.’
The U.S. Department of Justice announced charges and a plea agreement in November 2024. McWhorter admitted to conspiring to defraud a Texas-based company, resulting in the transfer of $400,000 from the company, with McWhorter personally receiving $90,000. The fraudulent activities occurred between 2019 and 2020.
McWhorter’s defense attorney asserts that the actions were unrelated to his role as the CEO of Palmetto Railways and the South Carolina Railway Commission. However, McWhorter faces charges of honest services fraud, which involves using one’s professional position for personal gain. As the President of Palmetto Railways at the time, McWhorter was obligated to disclose all financial transactions, gifts, and earnings to the South Carolina Commission on Ethics, as the company is a semi-government entity tied to the state Department of Transportation.
In his plea, McWhorter acknowledged that he had facilitated the introduction of a Charleston-based business associate to a Texas company to help secure a contract. Once the contract was awarded, McWhorter, along with the business associate and a company employee, arranged for a portion of the contract funds to be fraudulently paid to McWhorter.
The Department of Justice is expected to advocate for the maximum sentence, and McWhorter remains out on bond until his sentencing. As part of the plea agreement, McWhorter has agreed to cooperate fully with authorities by revealing details about other criminal activities and individuals involved, in exchange for full immunity regarding any further self-incrimination.
McWhorter retired from Palmetto Railways in January 2022 after serving as CEO since 2007. Palmetto Railways issued a statement acknowledging the situation, emphasizing their commitment to cooperating with law enforcement throughout the legal process.
McWhorter will now meet with a sentencing official to prepare for his hearing, with the date of the hearing yet to be determined.