MACHIAS, Maine — A federal appeals court Monday affirmed the convictions and sentence of former Passamaquoddy Gov. Robert Newell of Indian Township, while vacating one count against the tribe’s former financial director James Parisi Jr. of Portland. The court also reduced the more than $1.6 million in restitution owed by Parisi by nearly $130,000.

The two men were convicted in 2008 of misappropriating $1.74 million from the Passamaquoddy Tribe by diverting and improperly spending grant money and other federal funding, according to documents filed with the 1st U.S. Circuit Court of Appeals in Boston.

Newell, 68, was sentenced in 2008 to five years in prison and ordered to pay $1.74 million in restitution; Parisi, 50, was sentenced to one year and one day and to pay $1.62 million in restitution. Parisi was released from prison on April 9, 2010, according to court documents. Newell remains incarcerated in Pennsylvania with an estimated release date of September 2013, according to the Federal Bureau of Prisons.

Newell was convicted of 29 crimes, including conspiring to defraud the U.S., misapplication of government funds, fraud and lying to federal agencies. Parisi was convicted of 11 crimes, including conspiracy, misapplication of tribal and federal funds and lying to federal agencies. The men’s crimes are all related to the use of restricted federal funds awarded to the Passamaquoddy from 2002 to 2006.

Newell and Parisi conspired by misapplying approximately $1.7 million dollars that had been awarded for tribal programs, according to the 29-page ruling filed Monday.

They also diverted funds from the tribal employees’ retirement account. Court documents also stated that Newell used the restricted federal funds and the funds of the tribe’s Indian Health Center to benefit himself, his family and other tribal members with whom he curried favor. Newell used many of these restricted funds to provide approximately $1.6 million in general assistance to tribal members during 2006, his last year in office, according to the documents.

“Neither Newell nor Parisi was accused of lining their own pockets,” the ruling stated. Newell spent money on his friends, family and tribal council members and their families. The ruling called the actions “Newell’s ongoing financial tomfoolery,” and indicated that “when Newell was defeated in 2006 elections, the Tribe had only enough money left to pay one person’s salary — Newell’s.”

Parisi was convicted of assisting Newell by diverting more than $800,000 of restricted funds awarded to the tribe from the Bureau of Indian Affairs to run various programs such as the tribe’s police, fire and education departments and the tribal court.

An audit following Newell’s tenure revealed the tribe was beyond broke — it had no cash, had lost $2 million from its general fund, owed federal programs $1.7 million and had additional debts of nearly $4 million.

Monday’s appeals’ court ruling left all of Newell’s convictions and sentence intact, but decreased the amount of restitution owed by Parisi by $129,044. It also vacated one of Parisi’s convictions which alleged he made false statements when he signed a federal financing report that he knew to be untrue.

The court ruled that there was not sufficient evidence to prove that Parisi knew the information on the form was incorrect.

Parisi’s attorney, George Dilworth of Portland, said late Tuesday that he had not had a chance to review the ruling and could not comment. Mary Davis, Newell’s attorney, did not return a call for information Tuesday.

The full court ruling can be found online at: