AUGUSTA — The state has dismissed charges of forgery, theft and accepting kickbacks against former Chelsea selectwoman Carole Swan so that she will face more far-reaching and serious federal charges.

Acting District Attorney Alan Kelley on Monday filed a dismissal in Kennebec County Superior Court.

“The conduct we indicted her on is clearly contained in the federal indictment,” Kelley said. “That supersedes our charges.”

Cash bail of $25,000, which had been posted for Carole Swan, was returned by the court after the dismissal was filed.

Swan, 53, was indicted July 27, by a grand jury in Kennebec County on charges of aggravated forgery Feb. 1, 2011; attempted theft from the town Feb. 3, 2011; and two counts of improper compensation for services between Sept. 24, 2009, and Jan. 25, 2010.

On Feb. 29, a federal grand jury indicted Swan on 17 separate charges and indicted her husband, contractor Marshall Swan, 54, on 10 charges.

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Maximum prison sentences and fines are higher on the federal charges. Carole Swan faces maximum penalties of up to 20 years in prison on some of the federal charges; she had faced up to 10 years on the state charges. Marshall Swan faces a maximum of 10 years in prison on some of his federal charges.

Both Swans were arraigned last Thursday in U.S. District Court in Bangor and pleaded not guilty to all counts.

They were released on conditions that they not commit any criminal acts and that they stay away from Whitefield contractor Frank Monroe and his family. Carole Swan is accused of extorting money from Monroe on three separate occasions in exchange for awarding him town contracts.

An additional condition on Marshall Swan requires him to refrain from excessive use of alcohol.

Also, the two are banned from contact with people who might be victims or witnesses in the investigation or prosecution.

While U.S. Magistrate Judge Margaret Kravchuk scheduled a trial date of May 1 for both Swans, the Swans’ attorneys said they would need more time to review the hundreds of thousands of investigation documents gathered by five federal investigating agencies, as well as the Kennebec County Sheriff’s Office.

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The federal prosecutor, Assistant U.S. Attorney Donald Clark, said he would not object to a longer period for evidence discovery. Kravchuk ordered the attorneys to meet within five days of the arraignment to discuss those issues.

Carole Swan faces three counts of Hobbs Act extortion related to dealings with Monroe (the Hobbs Act covers extortion or robbery that affects interstate commerce); five counts of tax fraud and false statements, allegedly for failing to report $600,000 in income to the Internal Revenue Service over a five-year period; fraud involving the Federal Emergency Management Agency for work Marshall Swan did on the Windsor Culvert Project; and four counts of making false statements to gain federal employee compensation. She is represented by attorney Leonard Sharon.

Marshall Swan faces the same five counts each of tax fraud and false statements and five counts of aiding and abetting fraud on a program receiving federal money. He is represented by attorney Walter McKee.

Betty Adams — 621-5631

badams@centralmaine.com

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