Thursday, April 17, 2014
By BETTY ADAMS Kennebec Journal
BANGOR — Chelsea contractor Marshall Swan was convicted Wednesday of five counts of filing false income tax returns for the years 2006-2010.
The verdicts came on the third day of Swan’s trial in U.S. District Court in Bangor. Jurors deliberated for about two hours. A judge allowed Swan to remain free on bail and told him he will be sentenced after an investigation that could take weeks or more.
“We’re deeply disappointed in the verdicts,” Swan’s attorney, Walter McKee, said minutes after the trial ended.
Swan, 56, left the Bangor courthouse immediately and did not speak to the media. McKee said he would be speaking on Swan’s behalf.
Swan’s wife, former longtime Chelsea Selectwoman Carole Swan, was convicted of the same offenses in July as well as on two charges of defrauding the federal workers’ compensation program. The Swans were to be tried together until Carole Swan’s attorney indicated that part of her defense was that she was subjected to domestic abuse by her husband that affected her behavior and decision-making.
U.S. District Court Judge John A. Woodcock Jr. then granted McKee’s request to separate the trials.
On Wednesday, McKee said he has not discussed with Marshall or Carole Swan the status of the couple’s relationship. McKee reiterated his earlier statement that Marshall Swan denies abusing his wife.
Carole Swan told the judge during her trial that she had left her husband in June and was living with a sister in Chelsea.
As part of his sentence, Marshall Swan is expected to be ordered to repay $145,000 in income and self-employment taxes due in those years, along with penalties and interest.
Each count of falsifying a tax return carries a maximum penalty of three years in prison and a $250,000 fine.
The prosecutor, Assistant U.S. Attorney Donald Clark, told jurors that Marshall Swan underreported $650,000 in tax years 2006-2010.
“This was not a rounding error,” Clark said. “This was a sustained effort over five years to report 80 percent of his income. In three years, one of three dollars was not reported on his income tax.”
Clark said Swan reported earning $2.4 million over that five-year period but paid no income tax until 2010, when he paid about $2,000.
“In 2008, he qualified for the earned income tax credit, which is for poor people,” Clark said. “This is not a family that qualified for the earned income tax credit in 2008.”
McKee said Marshall Swan was unaware that the tax returns were false because Carole Swan did all the office work and bookkeeping and was responsible for providing all the tax information to the preparer.
McKee also suggested to jurors that Marshall Swan did not sign the tax returns himself, but that Carole Swan signed his name on them, as well as on numerous checks that were cashed at various banks instead of being deposited into the business account for Marshall Swan Construction.
McKee said his client was in the field on an excavator and didn’t track all of his income.
“As it turns out, Marshall Swan does, in fact, owe income tax,” McKee said. He praised the prosecutor’s work of gathering figures, including the bank records and canceled checks.
“Probably the best job that they’ve done here in this case against Marshall Swan is proving beyond a reasonable doubt that Carole Swan is guilty of filing false tax returns,” McKee said.
He said business checks that went instead into bank accounts held by Carole Swan, and jointly by Carole Swan and son Jacob Swan, could have gone to support the harness horse-racing business owned by Carole Swan.
The final witness Wednesday was Rodney Guigere, special agent with the Internal Revenue Service. He testified that checks written to Marshall Swan Construction totaling about $500,000 were deposited not into the business account, but into one co-owned by Carole Swan and her son Jacob. In addition, some $200,000 in checks were simply cashed, not deposited.
Clark, the prosecutor, asked jurors to remember the testimony of Frank Monroe, a Whitefield contractor and sometime-competitor with Marshall Swan for road maintenance and plowing jobs.
“Frank Monroe testified Marshall Swan was a very sharp businessman,” Clark said. “He was a sharp businessman and he knew how to track his income.”
Monroe was the main witness against Carole Swan in September at her trial on federal extortion charges. She was convicted of accepting bribes from Monroe on three occasions from January 2010 to February 2011 in exchange for renewing his plowing and sand contracts with the town of Chelsea.
Clark also left the building without commenting on the verdict. In the past he has directed questions to U.S. Attorney Thomas E. Delahanty II.
Betty Adams can be contacted at 621-5631 or at: