An appeals court panel on Friday closely examined the circumstances under which a former Chelsea selectwoman was questioned by deputies during an extortion investigation.

A lawyer for Carole Swan told the three judges that Swan was in custody for almost two hours after deputies approached her in the parking lot of a dry-cleaning establishment on Chapel Street in Augusta and demanded she return a sting package she had just received from Whitefield contractor Frank Monroe.

During oral arguments Friday at the 1st U.S. Circuit Court of Appeals in Boston, Attorney Darla Mondou concentrated her efforts on Swan’s initial contact on Feb. 3, 2011, with Deputies Ryan Reardon and David Bucknam.

Mondou asked the judges to vacate an earlier denial of a motion to suppress that interview and order new trials in the case.

Mondou told the judges that “the unconstitutional conduct” of the two deputies deprived Swan of her rights. Therefore, Mondou maintained, Swan’s confession — captured on a DVD — to taking the money should not have been used at her subsequent trials in U.S. District Court.

Swan previously testified that she lied to the deputies, telling them anything she thought they wanted to hear so she could leave.

The interview followed a sting arranged by the deputies after Monroe came to them saying Swan wanted him to overbill the town for sand and kick back $10,000 of the money. The officers photographed Monroe’s truck and Swan’s pickup side by side on Chapel Street that day where Monroe passed a sting package to Swan containing several hundred dollars.

On Friday, Assistant U.S. Attorney Margaret D. McGaughey urged the judges to uphold the decision by a magistrate judge who presided at the initial hearing on a motion to suppress that interview in December 2012 and found that Swan was not in custody and that her statements were admissible.

“The magistrate judge found as a fact that the police officers were more credible witnesses,” McGaughey said.

McGaughey said Swan agreed to have Bucknam ride with her as she drove a few blocks to the sheriff’s office and that deputies told Swan numerous times during the interview that she was not under arrest and was free to leave at any point.

She also told the panel that 24 jurors failed to believe Swan’s story because they convicted her.

However, Mondou told them that the combination of the officers’ vehicle blocking Swan’s from leaving the parking lot, the demand for the money and the taking of her cellphone indicates that Swan was in custody. “She had no way to call for help,” Mondou said.

Mondou also argued that the confession should have been excluded from Swan’s tax fraud trial. She said it “was unnecessary, prejudicial. They would have gotten the conviction on the tax fraud without the extortion and that, your honor, is the prejudice from the admission of the confession.”

Swan, 57, is serving an 87-month prison term for taking kickbacks and defrauding the federal government.

She was convicted Sept. 17, 2013, of three counts of extortion for using her position as a selectwoman to seek kickbacks from Monroe, who held the contract to plow and sand Chelsea’s roads. Swan was convicted July 27, 2013, of two counts of workers’ compensation fraud and five counts of income tax fraud. She is currently imprisoned at the Federal Correctional Institution in Danbury, Connecticut.

Swan’s appeal to the U.S. First Circuit Court of Appeals is the latest in a long series of court battles in the case.

In November 2014, U.S. District Court Judge John A. Woodcock Jr., who presided over both jury trials, rejected Swan’s attempt to add an enhanced transcript of that interview. The enhanced transcript would have clarified passages listed as “unintelligible” on the transcript submitted as evidence at Swan’s trials, Mondou had maintained.

On Oct. 22, 2014, Woodcock also rejected Swan’s second bid for freedom pending appeal.

On Friday, one judge said he was looking at three facts in particular: deputies blocking Swan’s car from leaving the parking lot, their taking of her cellphone and one deputy riding along in Swan’s vehicle as she drove to the sheriff’s office.

A judge also questioned whether Swan had voluntarily turned over her cellphone and whether the deputies’ refusal to return it to her immediately — saying it would distract her — might be pretextual.

The decision of the judges is issued later in writing.

Betty Adams — 621-5631

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Twitter: @betadams