Former Chelsea selectwoman found not guilty on misuse of fed funds; guilty of tax, workers’ comp fraud

By Judy Harrison, BDN Staff
Posted July 26, 2013, at 3:42 p.m.

BANGOR, Maine – A federal jury delivered a split verdict at midnight Friday after deliberating for more than nine hours following the three-week trial of a former Chelsea selectwoman.

The jury of six men and six women found Carole Swan, 55, not guilty on two of four counts of workers’ compensation fraud and not guilty of the illegal use of federal funds used to pay for a culvert with money from the Federal Emergency Management Administration.

Jurors found Swan guilty on five counts of tax fraud from 2006 to 2010 and two counts of lying in 2008 and 2010 about her income and work history to receive workers’ compensation benefits. The jury rejected Swan’s contention that she was justified in breaking the law due to alleged abuse at the hands of her estranged husband, Marshall Swan.

U.S. District Judge John Woodcock ordered that Swan remain free on personal recognizance bail.

A sentencing date is not expected to be set for several months.

Carole Swan testified earlier this week in U.S. District Court that she was a battered wife and endured years of abuse at the hands of her estranged husband, owner of Marshall Swan Construction. She said that she did what he told her to do and did not intentionally break the law.

Assistant U.S. Attorney Donald Clark, who prosecuted the case, declined to comment on the verdict.

Defense attorney Leonard Sharon of Auburn said that he was disappointed in the verdict overall but “very happy we won the culvert case.”

The tax fraud charges alleged the couple underreported their taxable income between 2006 and 2010 by more than $650,000. Carole Swan was accused of lying about her sources of income to obtain about $30,000 in workers’ compensation a year between 2008 and 2011.

She also was accused of charging the town $130,000 for a culvert job on Windsor Road that cost only $58,000, according to court documents. The funds to fix the culvert from FEMA allegedly were paid to Marshall Swan Construction, which is owned by the couple, according to Clark

Originally, Marshall and Carole Swan were to be tried together. Woodcock ruled a few days before the trial began on July 8 that they should be tried separately. The judge reversed an earlier ruling that the Swans be tried together after the abuse allegations were made.

Marshall Swan is to be tried in October.

Carole Swan still faces a separate trial on extortion charges. A date for that trial has not been set.

Those charges stem from Carole Swan’s alleged use of her position as a town leader to extort money from an area construction company by overpaying and getting kickbacks. She had the town overpay the construction company — a plowing contractor named Frank Monroe — and received a kickback from him for $3,000 in January 2010, and another $7,000 in December 2010, according to the indictment. In the third extortion count, she allegedly asked the contractor to inflate his bill for road sand so she could get $10,000.

Information about Swan’s income from Monroe was introduced by the prosecution only to show that she had unreported income, Clark told the jury in his closing argument.

Carole Swan testified earlier this week that she was conducting a sting operation on her own and planned to take information about Monroe demanding kickbacks to the Kennebec County District Attorney.

The judge told jurors they first had to decide whether the defendant was guilty or not guilty beyond a reasonable doubt on each of 10 counts. If they found her guilty, jurors then had to decide by a preponderance of the evidence if her actions were justified due to the abuse.

To find her actions justified, the jury had to find that she acted on an unlawful and immediate threat of serious bodily injury or death, that she had no chance to refuse to perform the criminal act and that she committed the crime only because of the threat.

Carole Swan faces up to five years on the workers’ compensation fraud counts and up to three years on the tax fraud charges. If she had been convicted on the charge related to the misuse of FEMA funds, she could have been sent to prison for up to 10 year.

In addition to prison time, she also could be ordered to pay fines of up to $250,000 and restitution of nearly $400,000.

http://bangordailynews.com/2013/07/26/news/mid-maine/jury-begins-deliberating-in-ex-chelsea-selectwomans-fraud-trial/ printed on October 2, 2014