BANGOR — His wife, family, friends and even the Chelsea businessman who committed federal tax fraud by underreporting $650,000 in earnings over a five-year period were surprised when he was taken into custody directly after learning Monday he’ll be spending the next two years and nine months in prison for his crimes.

Friends and family of Marshall Swan, 56, could be seen in the courtroom at the Margaret Chase Smith Federal Building with their mouths open in shock and shaking their heads after Chief Judge John A. Woodcock Jr. handed down his sentence in U.S. District Court. Swan also was fined $40,000, which is 10 percent of his known assets, and sentenced to a year of supervised release.

Swan was surprised, defense attorney Walter McKee of Augusta said shortly after court adjourned.

“It was pretty unexpected. It’s mandatory in drug cases but [not in others],” McKee said.

Marshall Swan was found guilty by a jury in October on five counts of tax fraud for knowingly underreporting the income from his construction business, Marshall Swan Construction, to the IRS between 2006 and 2010.

“That for many Maine people is a fortune,” Woodcock said of the $650,000 in income that was not reported.

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Assistant U.S. Attorney Donald Clark said Swan wrote out bids for customers, collected money from them and deposited checks into business and personal accounts, so he had to have known how much money he was making.

Clark also prosecuted Swan’s wife, Carole Swan, 55, a former selectwoman of Chelsea who was convicted in July on five counts of tax fraud and two counts of workers’ compensation fraud. She was convicted in September on three counts of extortion for taking $10,000 from Frank Monroe of Whitefield. She is free on bail and awaiting her sentencing date.

Marshall Swan was allowed to hug her and their two sons before he was taken away by federal marshals. Carole declined to comment as she left.

Clark accused the couple of obstructing justice during their separate trials last year, and he asked that they spend more time in jail. He said Marshall Swan paid two known criminals to vandalize equipment owned by Monroe, and Woodcock agreed after hearing testimony from both sides earlier in the day.

Career criminal Samuel Stone testified Monday that Marshall Swan paid him and a friend $200 to damage the property of Monroe and Andy Swan, brother of Marshall Swan, after newspaper articles about the couple’s federal indictment in which Monroe and Andy Swan were quoted. Stone testified he and his friend, who committed suicide last year, saw Andy Swan near his front window, so they took items from his garage instead of committing vandalism.

Supporters of Swan testified that Stone lied on the stand.

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Monroe, who was in the courtroom all day, said after court that he planned to make a comment, but “not until after the next one,” referring to the sentencing of Carole Swan.

Woodcock said that intimidating witnesses strikes at the heart of the judicial system.

“I have found you attempted to obstruct justice by paying people to vandalize Frank Monroe’s equipment — this is particularly reprehensible conduct,” he said. “If this was to go unpunished, it would threaten the very foundation of our judicial system.”

“This entire episode has been particularly hard on the people of Chelsea,” some that supported the Swans and others who didn’t, Woodcock went on to say. “You split your own community down its fault lines.”

“The true victim is everyone who pays their fair share in taxes,” the judge said later. “In cheating on your taxes, Mr. Swan, you cheated everyone.”

Woodcock also said he did not think Marshall Swan had yet taken full responsibility for the crimes he committed.

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“You are not the victim of your own crime,” the judge told him. “You committed the crimes. These were not one-time mistakes … These were a way of life.”

Woodcock said he believes that Marshall Swan and his wife believed that they ran the town of Chelsea and were therefore “above the law.”

Marshall Swan also gave an IRS agent at the courthouse a check for $145,000 to pay taxes owed by the couple.

“We’re disappointed by the sentence,” McKee said. “We hoped for significantly less, especially since he paid the $145,000 for his back taxes.”

Marshall Swan said he wanted to testify, but changed his mind after learning Clark would be able to question him about the crime.


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