Saturday, March 8, 2014
By Betty Adams firstname.lastname@example.org
BANGOR — Carole and Marshall Swan of Chelsea listed on their federal tax return a gross income of negative $110,518 for the 2006 tax year.
Carole Swan, left and defense attorney Caleigh Keevan are seen outside U.S. District Court in Bangor today, at the end of the second day of Swan's fraud trail.
Staff photo by Betty Adams
That includes a business loss of $38,000 and another loss — so far unspecified — of $79,600, in addition to $4,000 in earned wages and other gains and losses.
Testimony from Paul Crowley, a court witness coordinator from the Andover, Mass., office of the Internal Revenue Service, was halted at 2:30 p.m. Tuesday, and is expected to continue Wednesday morning in U.S. District Court in Bangor.
Also Tuesday, a former town official said Swan exerted pressure so he would award town work to Marshall Swan Construction, which was owned jointly by the couple.
Crowley was presenting the tax return in support of the government's charge that the Swans falsified their income tax returns for the tax years 2006–2010.
In opening arguments Monday, the prosecutor, Assistant U.S. Attorney Donald Clark said Marshall Swan Construction had $2.4 million in income during those years and paid almost no income tax because Carole Swan claimed huge losses for a harness horse racing business.
In court filings, Swan's attorney, Leonard Sharon said the business was her brother's, but the horses were bought in her name because of his bad credit. Sharon also said that Carole Swan was abused by her husband and feared him.
Carole Swan, 55, is on trial on income tax fraud charges as well as charges that she defrauded the federal workers' compensation system and a federal program funding repairs to Windsor Road while she was a town selectman.
Tuesday was the second day of her jury trial. Her husband faces similar charges of falsifying income tax returns and of aiding and abetting in the federal program fraud. He is to be tried at a later date.
Former Chelsea Town Manager Robert Drisko testified Tuesday that he believes then-Selectwoman Swan exerted pressure outside of selectmen's meetings to ensure her husband, who ran Marshall Swan Construction, got a lot of the town's road work.
Drisko, testifying in the second day of Swan's trial on multiple fraud charges, said, "She would work outside to get her own way. That's my own opinion."
Drisko spent more than an hour on the witness stand in U.S. District Court describing Chelsea's process for awarding road work.
Most of the dozen other witnesses talked for five minutes or less, testifying about work Swan's husband, Marshall Swan, did on their property and how they paid for it and whether they dealt with Carole or Marshall Swan. Most praised Marshall Swan's work, and several said they never saw or spoke to Carole Swan.
Cynthia E. Reynolds, of Vassalboro, testified that Marshall Swan did earthwork at her house in the spring of 2007 for $29,000, and she paid $10,000 with a bank check, and $19,000 in cash. There was no contract or paperwork, she said.
"Everybody recommended Marshall," she said, so she and her husband trusted him.
Drisko, who was town manager in Chelsea from 1997 until his retirement in 2004, said Marshall Swan, too, would ask him why he didn't get more town work.
"He was chewing me out," Drisko testified.
Drisko said that early in his tenure the road work that was under the minimum for contract bids was divided more evenly among town contractors, but later, Marshall Swan got more of it.
It's a wonder Marshall Swan had time.
Ten people testified Tuesday that they hired Marshall Swan Construction to do earth-moving as well as to install or repair septic systems, and most generally bought gravel from him. Most said they dealt only with Marshall Swan and had no contact with Carole Swan.
One woman, however, Frances Simard, testified she dealt directly with Carole Swan when Simard bought a lot on McLaughlin Circle from her on Feb. 26, 2007.
Simard testified Carole Swan demanded that Marshall Swan be hired to do the ground work to prepare the property for a home, and that the $23,050, be prepaid.
"I had to do it at the closing or she wouldn't sign the documents for me to purchase the property," Simard said.
Simard said she repeatedly asked for a contract, but was only given a receipt for the check signed by Carole Swan. Simard said she located the receipt Monday night in her storage shed, so she brought it to court Tuesday.
Lionel Cayer, engineer for the city of Augusta, testified the city paid Marshall Swan $22,550 for work done on city streets October and November 2006.
The prosecutor, Assistant U.S. Attorney Donald Clark, asked several witnesses, including Simard, whether they had noticed Carole Swan having trouble with her right arm. All denied seeing anything like that. Carole Swan received federal workers compensation for years as a result of a shoulder injury suffered when she worked as a rural mail carrier for the U.S. Postal Service.
Swan wrote on several forms that she was disabled and could not work at all, including housework.
Clark also asked those who saw Carole and Marshall Swan together whether she appeared to be in fear of her husband. None said they noticed anything like that. Several said Carole Swan brought lunch to her husband while he was working for them.
There was a half-hour delay in the proceedings Tuesday morning when one of the jurors became ill.
When the trial resumed, one of the male jurors was absent.
Swan's trial on multiple counts of fraud began Monday afternoon in U.S. District Court in Bangor following a morning spent selecting eight men and seven women to serve as jurors and alternates.
At 9 a.m., just as a second witness was to begin testifying, the judge called a recess, telling those in the courtroom that he had received a note saying a juror was ill.
Shortly afterward, attorneys spoke to Chief Judge John A. Woodcock Jr. in chambers, and 30 minutes later, the trial proceeded with 12 jurors, and two alternates, seven men and seven women.
Woodcock told the remaining jurors that the ill man was receiving medical treatment and would not return to the panel.
By the end of Tuesday, the prosecution had called 22 of the witnesses on its list of more than 100 potential witnesses.
Betty Adams — 621-5631