Former Chelsea Selectman and Husband Indicted on Federal Charges

PORTLAND, ME—United States Attorney Thomas E. Delahanty, II announced today that a federal grand jury sitting in Portland indicted Carole Swan, age 53, of Chelsea, Maine, charging her in three counts with Hobbs Act extortion, in five counts with making false statements in federal income tax returns, in four counts with making false statements to obtain workers’ compensation benefits, and in five counts with obtaining over $5,000 by fraud from a program receiving federal funds (federal program fraud). Her husband, Marshall Swan, age 54, of Chelsea, was also indicted and charged in five counts with making false statements in federal income tax returns and in five counts with aiding and abetting federal program fraud.

According to the indictment, Carole Swan was a member of the Chelsea Board of Selectman. Between January 2010 and February 2011, using her position, she extorted and sought to extort $20,000 from a local construction company. The Swans are both charged with filing false federal income tax returns from 2007 through 2011 in which they under-reported more than $675,000 in gross receipts and sales. Carole Swan is charged with obtaining workers’ compensation benefits from 2008 through 2011; by failing to report her extortion activities, her ownership and work for Marshall Swan Construction (MSC), and a harness horse racing business; and by under-reporting the hours she worked as a selectman. She is charged with obtaining by fraud from Chelsea in 2007 $396,880 from the Windsor Road Culvert Project awarded to MSC, in which she misled town employees and officials and other bidders that the material cost of the culvert pipe was $130,000, which she caused Chelsea to pay, when, in fact, the culvert pipe cost $58,000. Marshall Swan is charged with aiding and abetting that federal program fraud.

The extortion charges each carry a maximum penalty of 20 years in prison; the tax charges, a maximum penalty of three years in prison; the workers’ compensation charges, a maximum penalty of five years in prison; and the federal program fraud charges, a maximum penalty of 10 years in prison. Defendants also face a $250,000 fine, restitution, and supervised release on each count and forfeiture of the proceeds obtained from the federal program fraud.

The case was investigated by the Federal Bureau of Investigation; Internal Revenue Service; Department Homeland Security, Office of Inspector General (“OIG”); U.S. Department of Labor, OIG, Office of Labor Racketeering and Fraud Investigations; U.S. Postal Service, OIG; and the Kennebec County Sheriff’s Office.

An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law.