Charleston, S.C. – Jeffrey McWhorter, former president and CEO of Palmetto Railways, has been sentenced to five years of probation after pleading guilty to a federal fraud charge. His sentencing took place on Thursday, May 22, 2025, in federal court in Charleston, following a serious white-collar crime that shocked many across South Carolina.
What Happened?
McWhorter, aged 63 and a resident of Awendaw, admitted to accepting a cash kickback in a deal involving the construction of a $35.5 million plastic pellets warehouse near the Port of Charleston. The warehouse was meant to serve a major port client, Frontier Logistics, a Texas-based company involved in exporting plastic pellets.
The crime occurred during McWhorter’s time as head of the state-owned Palmetto Railways, which provides rail services to businesses connected to the port. He held the position from 2007 until his retirement in 2022.
“I made a horrible decision,” McWhorter told the court, holding back tears. “This act does not reflect the person I’ve tried to be all my life.”
Inside the Kickback Scheme
Court documents revealed that McWhorter worked with Kevin Newkirk, a VP at Frontier Logistics, and Tony Berenyi, a Charleston-based contractor. The trio agreed to steer the construction contract to Berenyi’s company, Berenyi Inc., in exchange for kickback payments.
Initially, they discussed asking for $2 million, but eventually settled for $1 million. In the end, $420,000 was promised. McWhorter and Newkirk were to split this amount. However, only part of the money was paid, and Newkirk ended up receiving about $84,000.
The case came to light only after federal investigators, looking into another unrelated kickback scheme involving Berenyi in Kentucky, stumbled upon the Charleston deal.
The Court’s Decision
The U.S. Attorney’s Office asked for 8 to 14 months in prison, arguing that McWhorter abused public trust for personal gain. “This was stealing,” said Judge David Norton, who oversaw the case. “It was a betrayal of everything he stood for.”
Despite this, Judge Norton sentenced McWhorter to probation instead of jail, influenced by over 20 letters of support from friends, family, and colleagues who described McWhorter’s actions as completely out of character.
Additional Penalties
In addition to probation, McWhorter must:
- Pay $90,000 in restitution (already deposited in an escrow account)
- Pay a $4,000 fine
- Complete 300 hours of community service
His lawyers said McWhorter was under financial pressure during the time of the crime due to a costly divorce, his daughter’s wedding, and relocation expenses. This stress, combined with the opportunity, led to the poor decision.
Who Else Was Involved?
- Kevin Newkirk was sentenced in April 2025 to five years of probation for filing a false tax return related to the same scheme.
- Tony Berenyi is currently in federal prison in Florida after being convicted in a separate kickback case in Kentucky. He is expected to be released later this year.
About Palmetto Railways
Palmetto Railways is a state-run short line railroad that connects South Carolina’s port clients to major rail lines. McWhorter was a central figure in several of the state’s major economic development projects over his 37-year career with the railway.
Jeffrey McWhorter’s fall from grace serves as a warning about the dangers of corruption and abuse of power. While he avoided prison time, the court made it clear that such acts by public officials will not be taken lightly. As South Carolina continues to grow its business and export sectors, transparency and accountability remain more important than ever.
