BANGOR — Former Chelsea selectwoman Carole J. Swan gave a big smile outside the courtroom early Saturday, where she had been on trial for three weeks on multiple federal fraud charges.

A jury had just cleared her of the most serious of those charges: alleged fraud in connection with a $396,880 town project to replace the Windsor Road culvert in 2007.

The project was awarded to her husband, Marshall Swan, and Carole Swan signed the warrants to pay for it while she was in office.

Swan, 55, also was cleared of two counts of committing fraud by falsifying documents she filed for federal workers’ compensation.

She was convicted of two counts of workers’ compensation fraud and five counts of falsifying income tax returns, by failing to declare about $650,000 in income from Marshall Swan Construction, the earth-moving company owned by her and her husband, and failing to pay $140,000 due in income and self-employment taxes.

She, a sister and her attorneys were packing up briefcases full of paperwork used throughout the case.

Chief Judge John A. Woodcock Jr. opted against requiring Swan to secure her bail, which the prosecutor requested, so she was free.

Woodcock told Swan she would be sentenced at a later date.

Each of the income tax fraud charges carries a maximum sentence of three years and a $250,000 fine. Each of the workers’ compensation fraud charges carries a maximum penalty of five years in prison, a $250,000 fine and restitution.

Her attorney, Leonard Sharon, told the judge she planned to live with her sister.

Swan testified she moved out of her family home July 7, the night before her trial started, to escape what she claimed was years of domestic abuse at the hands of her husband, Marshall Swan.

Sharon said early Saturday morning that Swan had told him eight months ago about being abused, but she refused to leave her family home until her younger son, John, 18, graduated from high school, which he did last month.

Sharon said he warned her the longer she waited, the more the prosecutor could use it against her. The prosecutor, Assistant U.S. Attorney Donald Clark, told the jury that Swan had opportunities to leave over the years and an independent income, but did not.

Clark said he had no comment on the verdict, as is usual.

As the initial guilty verdicts on the income tax counts were announced, Sharon put his arm briefly across Swan’s shoulders. Then there was a visible start at the defense table when the first “not guilty” verdict was announced.

The jury had deliberated for nine hours.

“We couldn’t have had a fairer trial,” Sharon said shortly after the jury gave its verdict. “We knew the income tax case was difficult. We’re very happy we won the culvert case. At least we’ve stopped the vendetta from the town, the disgruntled citizens.”

Sharon said during his closing arguments that there was a vendetta in the town to get Carole Swan.

Sharon Morang, who served as a Chelsea selectman from June 2007 to July 2010, denied there was a vendetta.

She said she is a member of Chelsea, Maine-Citizens Concerned for Our Town, founded by a group of people in 2010 and aimed at gathering public information about town business and publishing it on Facebook.

“It was done to make sure everything in town was transparent. It was a very gray area. We wanted to get all the information out to the citizens,” Morang said. “The only way to do it was to get people to sit in all the meetings.”

Morang was one of the few Chelsea residents who watched the trial. Witnesses were sequestered until they testified, and she sat and listened to almost two days of testimony after she was on the witness stand.

“I was just surprised that the evidence given wasn’t enough to make the jury understand fully what was happening in this town, and I feel sorry for the townspeople,” Morang said Saturday.

Swan’s legal future remains in flux. At the same time she was indicted on 10 counts of federal fraud, she also was indicted on three counts of Hobbs Act extortion for allegedly accepting kickbacks from Whitefield contractor Frank Monroe, in 2010 and 2011, in return for giving him town work.

Those charges, which carry maximum penalties of 20 years in prison and $250,000 in fines, will be tried later, and Sharon waived any speedy trial issues after Friday’s verdict came in.

Monroe testified in the second week of the trial that he gave Swan $10,000 in 2010, and then reported a third demand for money in early 2011 to Kennebec sheriff’s deputies.

He received immunity from prosecution about those incidents if he testified truthfully, Monroe told jurors.

The investigation into Swan and her finances started then.

Marshall Swan, 56, of Chelsea, faces the same five charges of income tax falsification — the Swans were indicted jointly on those charges — as well as a charge of aiding and abetting federal program fraud in connection with the Windsor Road culvert replacement project.

His attorney, Walter McKee, successfully sought to sever Marshall Swan’s trial from Carole Swan’s after Sharon outlined the domestic violence defense in paperwork filed with the court.

On Saturday, McKee said the posture of Marshall Swan’s case could change.

“While Carole’s acquittal on the federal program fraud doesn’t mean that Marshall’s aiding and abetting that same charge will be dismissed, you have to think it would give the government pause when considering whether to continue prosecuting Marshall on that case,” McKee said by email Saturday morning. “The tax case is going to be problematic for the government, too, since they spent the better part of a week presenting evidence about how Carole handled every single aspect of the finances, accounting and taxes.”

Marshall Swan’s trial is set to start Oct. 8 before Judge Woodcock.

Betty Adams — 621-5631
badams@centralmaine.com