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The former president and CEO of Palmetto Railways, a taxpayer-funded enterprise run under the auspices of the South Carolina Department of Commerce (SCDOC) — has been sentenced in federal court for his role in a kickback scheme that defrauded the public and violated ethics laws.
On Friday, federal prosecutors announced that Jeffrey McWhorter, 63, of Mount Pleasant, S.C, had been sentenced to five years of probation with 12 months of home confinement and electronic monitoring after pleading guilty to conspiracy to commit honest services fraud — a violation of 18 U.S. Code § 1346. McWhorter was also ordered to pay $75,198.02 in restitution, hit with a $4,000 fine and ordered to complete 300 hours of community service.
U.S. attorney Bryan Sterling had sought prison time for McWhorter. In a sentencing memorandum (.pdf) filed last month, Sterling’s office argued a term of incarceration — one within the advisory guideline range of eight to fourteen months — was warranted given the seriousness of the offense, McWhorter’s abuse of public trust and the need to deter future white-collar corruption.
Prosecutors emphasized McWhorter not only accepted secret cash payments but actively facilitated a bid-rigging scheme – and withheld financial disclosures as a state official. Nonetheless, U.S. district court judge David C. Norton ultimately declined to impose jail time.
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The former president of Palmetto Railways was sentenced today for his role in a conspiracy to commit honest services fraud. Read about this joint FBI Columbia and @IRSnews investigation in this @USAO_SC news release. https://t.co/JdUM9B9FPE pic.twitter.com/438hn5JvbI
— FBI Columbia (@FBIColumbia) May 23, 2025
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According to federal prosecutors, McWhorter used his leadership role at Palmetto Railways to benefit personally from a rigged construction bid involving Berenyi Construction — a Charleston-based firm led by Tony Berenyi.
The scheme began when McWhorter and Kevin Newkirk — an employee of a Texas-based logistics company — agreed to accept payments from Berenyi in exchange for helping him secure a construction contract with Newkirk’s company. At the time, the Texas firm had approached McWhorter for contractor recommendations. McWhorter introduced Berenyi, and as the bid moved forward, the parties discussed how kickbacks would be paid if Berenyi Construction won the contract.
After the bid was awarded, Berenyi wired a total of $420,000 to a bank account in the name of Newkirk’s wife. Newkirk then paid McWhorter his share in cash — totaling $136,500. These payments were never disclosed on the required ethics filings McWhorter was obligated to submit as a public official.
Newkirk was also charged in the scheme and was sentenced in April by Norton to five years of probation.
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RELATED | PALMETTO RAILWAYS CORRUPTION: CEO PLEADS GUILTY
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McWhorter’s sentencing concluded a years-long federal investigation that began shortly after his sudden 2022 retirement from Palmetto Railways — a government agency which manages industrial rail projects, including those tied to the North Charleston Navy Yard. As FITSNews previously reported, taxpayers paid McWhorter more than $200,000 annually, not counting bonuses. He received more than $130,000 in bonus payments from 2018-2020, according to an investigative report from Rick Brundrett of The (Columbia, S.C.) Nerve.
Brundrett had to submit a Freedom of Information Act (FOIA) request to obtain those salary records, as SCDOC does not publish the compensation of railway executives on the Palmetto State’s public salary database.
Palmetto Railways has long operated in a gray area of state government, wielding significant influence and taxpayer money with minimal public oversight or scrutiny. This case has renewed calls for increased transparency within South Carolina’s economic development infrastructure — and for re-evaluating the role of state-run enterprises in commercial contracting.
The case against McWhorter was investigated by the Columbia, S.C. field office of the Federal Bureau of Investigation (FBI) and the criminal investigation (IRS-CI) division of the Internal Revenue Service. Assistant U.S. attorney Amy Bower prosecuted the case.
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ABOUT THE AUTHOR …
Jenn Wood is FITSNews’ incomparable research director. She’s also the producer of the FITSFiles and Cheer Incorporated podcasts and leading expert on all things Murdaugh/ South Carolina justice. A former private investigator with a criminal justice degree, evildoers beware, Jenn Wood is far from your average journalist! A deep dive researcher with a passion for truth and a heart for victims, this mom of two is pretty much a superhero in FITSNews country. Did we mention she’s married to a rocket scientist? (Lucky guy!) Got a story idea or a tip for Jenn? Email her at jenn@fitsnews.com.
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1 comment
Why does the state operate a railroad? Another colossal waste of taxpayer money just like the state owned utility.