BANGOR — On trial on multiple federal fraud charges, former Chelsea selectwoman Carole Swan apologized repeatedly today for failing to tell the truth to deputies investigating the case and for failing to read loan applications and bank forms.

“I didn’t tell them all the truth and I’m very sorry for that because we wouldn’t be here today,” Swan told U.S. Attorney Donald Clark.

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Carole Swan Staff photo by Betty Adams

She also told him she was unsure whether she was an owner of Marshall Swan Construction, an earth-moving company that did almost $1.1 million in business with the Town of Chelsea from 2006-2010 while she was a selectwoman.

Clark showed her documents she signed for vehicle loan applications at O’Connor GMC in Augusta and a bank account signature card opening an account at Cushnoc Bank (now Northeast Bank) in the names of Marshall Swan/Carole Swan doing business as Marshall Swan Construction.

“I’m very sorry I signed these things without reading them,” she said.

Swan, who is accused of 10 counts of federal fraud, including falsifying income tax returns in 2010  by failing to report $10,000 she said she received in kickbacks from Whitefield contractor Frank Monroe, testified that facing federal criminal charges no longer fazes her.

“There are things in my life that have changed my attitude like having cancer,” she testified, without offering any details.

She said the prospect of being convicted would be minor.

“I’ve lived in prison. I can live in prison again.”

Swan testified that her husband was abusive, “controlling,” and “a monster.” She testified he presents a different face to the outside world.

“In the working world, he does wonderful work,” she said. “He’s wonderful to the customers.”

She told jurors she had left her home of 30 years at 46 J&J Lane.

“I moved out of the prison I lived in July 6,” she said. “It was best for me to leave, and I will not be going back there.”

Swan, 55, told the prosecutor she did not know where her new permanent home would be. “All I know is I’m a disabled woman who cannot work. I’m going to live with my sister.”

Some of the jurors took notes during the cross-examination, which lasted more than three hours Wednesday and is expected to resume today in U.S. District Court.

Later, when Clark questioned Swan about visiting her home during the trial and showed her registration records indicating she had checked out of the Vacationland Inn in Brewer at least once, Swan’s attorney called foul.

As the jury waited outside the courtroom, Leonard Sharon told the judge he had not been notified of the information by the prosecutor’s office.

“What I do know is there are people watching us outside this courtroom,” Sharon said. “I don’t know if there’s been an intrusion into the lawyer-client relationship.”

Swan resumed testifying briefly, but then Chief Judge John A. Woodcock Jr. sent the jury out again so he could address Sharon directly, telling him to quit “sighing, rolling your eyes, looking over the jury, grimacing and objecting by body language.”

“All I can do is rule on the evidence before me,” Woodcock said. “You’re conveying to the jury that my ruling is wrong.”

Sharon said he considers the inn his office for the duration of the trial and the “government spying on me” interferes with his ability to represent Swan.

Some of Swan’s family members and her lawyers are staying there as well.

Earlier Wednesday, Swan told jurors that she had lied during her interview with sheriff’s deputies when she told them she had been accepting bribes from Monroe for a long time and from Reuben Bartlett, who worked for another contractor.

“I’m sorry. I told them wrong,” Swan said. “It’s not the right thing to do.”

She said she wanted to end the interview quickly so she could contact her husband. She testified that she worried about being abused by him if she was out of contact for too long.

Clark also asked her about telling deputies she couldn’t read or write when they asked her to write a statement during that interview.

“I think I said I couldn’t read or write very well,” she testified Wednesday. “After you stay home all the years I have and don’t use your brain like that and take medication …” Then her voice trailed off.

She said she did not tell the deputies she had been investigating Monroe, but that she had told her husband and two other people.

Clark questioned her about Marshall Swan Construction receiving more than $1.1 million from the town of Chelsea from 2006 to 2010 — while she was on the Board of Selectmen. She and Marshall Swan are accused of falsifying their income tax returns. Marshall Swan is scheduled to be tried separately on those charges.

Carole Swan also agreed with the prosecutor that she had commingled Marshall Swan Construction income — the prosecutor estimated $600,000 to $700,000 between 2006 and 2010 — in a personal account where she and her son Jacob were both signers, and got $90,000 in cash from business checks in that same period.

“I did not keep track of it the way I should have,” Carole Swan said. “I’m sorry. It was human error.” She said she just did the banking for her husband.

“I cash the checks. I bring the money home. I put it on the table. I do as I am instructed,” she said.
Swan denied having any intent to falsify her income tax returns. “I thought what we was doing was OK.”

Swan is charged with failing to report $650,000 in business income and failing to pay more than $145,000 in income tax. The Swans, who file jointly, paid about $2,000 in income tax over those five years.

She also denied inflating a bill for the 2007 Windsor Road culvert project, which was largely funded by the Federal Emergency Management Agency. Records show Marshall Swan paid $58,000 for the culvert, and Carole Swan gave an invoice to the town seeking $130,000 for it. She said there was no fraud since Marshall Swan Construction put in a lump sum bid of almost $397,000 to repair the washed-out culvert.

Jurors saw the culvert project via color pictures presented by Sharon. The photos showed the pieces of the metal culvert being assembled on site by a crane. The culvert pipe itself appears large enough for a vehicle to drive through it.

Betty Adams — 621-5631
badams@centralmaine.com