Thursday, April 24, 2014
By BETTY ADAMS Kennebec Journal
Former Chelsea Selectwoman Carole Swan, convicted Friday of tax and workers’ compensation fraud, faces another trial in federal court in early September, this time on extortion charges.
Staff photo by Betty Adams
Swan, 55, is accused of extorting money on three occasions between January 2010 and February 2011 from Frank Monroe of Whitefield, who had contracts to plow, salt and sand Chelsea roads. Swan is accused of violating the Hobbs Act – extortion under color of official right, which addresses public officials using their office to extort money.
Those charges were separated from the others after Swan, through attorney Leonard Sharon, said she wanted to testify in her own defense on some charges, but not on others.
Ultimately she took the stand in the fraud trial, spending two days on the witness stand.
On Wednesday, U.S. District Court Chief Judge John A. Woodcock Jr. ordered a Sept. 4 jury selection in the extortion case, with the trial set to begin 8:30 a.m. Sept. 10 in Bangor.
Woodcock denied Sharon’s request to get a continuance until October. Sharon said Swan’s three-week trial on fraud charges forced him to obtain postponements in his cases in state court, and he expected two of those cases to go to trial in September.
In a written request to the judge, Sharon said, “Additionally, the recent trial received an exorbitant amount of media attention. The extra month will allow the memory of the first trial to recede from the minds of potential jurors.”
The prosecutor, Assistant U.S. Attorney Donald Clark, objected to the continuance.
In a filing last month in U.S. District Court in Bangor, Clark summarized the extortion evidence.
He noted that Swan was an elected member of the selectboard in Chelsea in 1992-2011, and allegedly sought to extort $10,000 from Monroe in January 2011 by “asking him to submit a fictitious and inflated invoice for road sand to Chelsea.”
According to an affidavit by Detective David Bucknam of the Kennebec County Sheriff’s Office, Swan told Monroe to bill the town “for 1,766 yards of sand at $12.50 per yard for a total sum of $22,075, even though the contractor had only delivered 528 yards of sand and to kickback $10,000 of the overpayment to her.”
Monroe reported the demand to sheriff’s deputies on Jan. 31, 2011, and deputies arranged for phone calls between Monroe and Swan to be recorded.
Excerpts of those calls were played for the jury during Swan’s recent trial.
In one call, Swan told Monroe to fax the bill to the town so a check could be cut that day.
Because of an intervening snowstorm, Monroe picked up the check from Swan’s home mailbox several days later, met the deputies, and exchanged it for a sting package containing $450 in singles made up to look like $10,000.
Monroe’s and Swan’s trucks were photographed stopped side by side on Chapel Street in Augusta Feb. 3, 2011, as he tossed the package into her vehicle. That photo too was shown at Swan’s trial.
Deputies almost immediately confronted Swan in a nearby parking lot, demanding the money, and she gave it to them.
Swan agreed to be interviewed at the sheriff’s office, about two blocks away, and the interview was videotaped.
She told them she expected to get money from Monroe, had previously received $7,000 from him, had a psychological problem and needed counseling, and said she received “$25,000 to $30,000 over the years for ‘greasing the wheels.’ ”
On the witness stand last week, Swan said much of what she told deputies that day were lies. Portions of her interview were played for jurors as well.
In an attempt to get Swan’s statements suppressed last September, Sharon wrote, “The question is what was Carole Swan’s intent when she unquestionably received monies from Mr. Monroe. Was she a criminal or a citizen conducting her own investigation?”
Clark said evidence will show that Swan received $3,000 in her driveway from Monroe around Jan. 25, 2010; an additional $7,000 from him on Dec. 3, 2010, at the Chelsea sand shed, and expected $10,000 on Feb. 3, 2011, from him.
Monroe testified on Aug. 18 that on the first two occasions he paid Swan with his own money. But when she told him to short the town on sand and kick back $10,000 to her, he said he felt he had to go to sheriff’s deputies.
“I was wrestling with who to go to and not have it come back to bite me,” he said.
Monroe received immunity from prosecution in regards to those payments in return for testifying, he said.
Swan has said she was investigating Monroe for allegedly overbilling the town and believed she had to get more than $10,000 from him so she could go to the district attorney’s office to get him prosecuted.
Part of her defense included testimony from her and her sons that she was subjected to domestic abuse by Marshall Swan, her husband of 29 years, and feared him so much she lacked intent to defraud.
On Friday, a jury convicted Swan of five counts of income tax fraud for the years 2006–2010 and two counts of defrauding the federal workers’ compensation program. Those convictions carry maximum prison terms of three to five years.
Woodcock allowed Swan to remain free on bail and delayed a pre-sentencing investigation in that case until after the extortion charges are resolved.
Swan was cleared of two additional counts of defrauding the workers’ compensation program, on March 15, 2010, and May 11, 2011, and of committing fraud on a federally funded program that paid for most of the 2007 Windsor Road culvert replacement project.
The maximum sentence on each of the extortion counts is 20 years in prison and $250,000 in fines.
Marshall Swan, 56, of Chelsea, is scheduled to go on trial Oct. 8 on the same five counts of income tax fraud for which Carole Swan was convicted. They filed their tax returns jointly. He is also accused of aiding and abetting federal program fraud. It is unclear whether that charge will remain in place since Carole Swan was cleared of committing fraud on a program receiving federal funds.
Betty Adams can be contacted at 621-5631 or at: