Judge drops culvert charge against Marshall Swan; tax fraud trial starts Monday

Posted Sept. 29, 2013, at 10:40 a.m.

BANGOR, Maine — A charge lodged against a Chelsea businessman that alleged he helped his wife, a former town selectwoman, misuse federal funds for a culvert repair has been dismissed by a federal judge.

Marshall Swan, 56, will be tried before a jury on five counts of tax fraud beginning Monday in U.S. District Court. The owner of Marshall Swan Construction is accused of underreporting the couple’s taxable income by more than $650,000 from 2006 to 2010.

Swan’s wife, Carole Swan, 55, who served 19 years on the Chelsea Board of Selectmen, was found guilty Sept. 17 on three counts of extortion for taking kickbacks in 2010 and 2011 from a Whitefield plowing contractor. She was found guilty July 26 in a separate trial on five counts of tax fraud and two counts of lying in 2008 and 2010 about her income and work history to receive workers’ compensation benefits.

Carole Swan was found not guilty in July on two counts of workers’ compensation fraud and not guilty of the illegal use of federal funds to pay for the culvert with Federal Emergency Management Agency money.

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Her acquittal on the culvert charge is why the U.S. Attorney’s Office filed a motion asking that the aiding and abetting count against Marshall Swan be dropped, according to court documents. U.S. District Judge John Woodcock granted the motion Tuesday, Sept. 24.

In her first trial, the jury rejected Carole Swan’s contention that she was justified in breaking the law because of alleged abuse at the hands of her estranged husband. At her second trial, jurors did not believe that she was conducting a sting operation and planned to take the money she’d received to the Kennebec County district attorney.

Marshall Swan’s attorney, Walter McKee of Augusta, has denied the abuse allegations. Marshall Swan has not been charged with domestic violence assault.

McKee has filed pretrial motions to keep evidence of Carole Swan’s convictions and testimony during her trials from being presented at Marshall Swan’s trial. The are expected to be ruled on Monday.

Woodcock, who presided over both of Carole Swan’s trials, will preside at her husband’s as well.

If convicted, Marshall Swan faces the same penalty his estranged wife does on her tax fraud convictions — up to three years in prison and a fine of up to $250,000 plus back taxes, interest and penalty payments.

He has been free on bail since pleading not guilty to the charges in March 2012.

Carole Swan faces up to 20 years in federal prison on the extortion convictions. She also faces up to five years for workers’ compensation fraud.

In addition to prison time, Carole Swan could be ordered to pay fines of up to $250,000 on each count and to repay workers’ compensation funds she illegally received as well as back taxes, interest and penalties.

Her sentencing date has not been set. She remains free on bail.

Carole Swan no longer lives with her husband in their Chelsea home, according to her attorney Leonard Swan of Auburn.

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