The FBI has seized nearly $850,000 in cash and watches from four Portland residents, and has filed documents in the case that suggest the assets were confiscated in connection with an investigation into illegal gambling.

The seizure, which occurred during raids conducted in April, included $500,000 in cash from a safe deposit box that was rented by Patricia Nixon, along with a substantial bank account, additional cash and expensive watches that were owned by her and Stephen E. Mardigan, a Maine businessman who owns commercial properties in and around Portland. Nixon and Mardigan live in the city in a home overlooking the Back Cove.

Federal prosecutors also have filed documents with the Cumberland County Register of Deeds that indicate authorities are likely to seek to keep Mardigan from selling any of his significant real estate holdings, which include four buildings on Chestnut Street in Portland that the city leases for use as homeless shelters, and two waterfront homes in Cape Elizabeth valued by the town at more than $1 million each.

A spokeswoman for Portland said the city is following the case closely.

Property on Tide’s Edge Road in Cape Elizabeth owned by Stephen Mardigan. Staff photo by Jill Brady

A notice of seizure was posted by the FBI on Monday. In addition to the cash from the safe deposit box, the list of confiscated items includes nearly $143,000 in cash seized from the home where Mardigan and Nixon live, most of it kept in plastic filing cabinets, along with expensive watches. Investigators in the case also seized nearly $75,000 in cash from William Flynn and nearly $8,000 from Steven DePaolo, both of Portland.

None of the four has been criminally charged with any wrongdoing.

The documents filed in connection with the seizure contain references to portions of federal law that relate to illegal gambling, although they do not specifically say that investigators believe the cash is connected to or came from illegal activity.

One of two homes on Tide’s Edge Road in Cape Elizabeth owned by Stephen Mardigan. Staff photo by Jill Brady

The fact that investigators are willing to go public with the seizures suggests the investigation has reached a turning point, said Richard Berne, a Portland defense attorney who was a federal prosecutor for five years in New York and San Francisco.

Berne, who is not associated with the case, said law enforcement agencies sometimes use seizures to pressure subjects of an investigation into discussing the case with prosecutors, including the possibility of plea bargains to avoid a trial.

Mardigan, Nixon, Flynn and DePaolo have 30 days to file a claim to get some or all of their assets back. However, Berne said doing so would carry the risk of admitting a potential connection to criminal activity if prosecutors show that the money or property came from illegal means. And he said there could be tax implications if they say the cash belongs to them but wasn’t reported to the IRS.

Prosecutors’ willingness to make the seizures public could mean that charges soon will follow, Berne said.

“I was a federal prosecutor for a number of years and you have a distinct advantage when you’re building your case in secret,” he said. Being willing to give up that secrecy means the investigation has reached a point where secrecy is no longer needed or advantageous, he said.

Civil seizures allowing authorities to confiscate money that may have resulted from a crime are a controversial tactic often used by law enforcement in lower-level drug cases, Berne said. But the amount of money involved in this case is unusually large, he said.

He said prosecutors are clearly hoping to tie up any money so it can’t be moved if it was either involved in furthering a criminal enterprise or was the result of criminal activity.

Investigators need to show a judge they have probable cause to suspect people of criminal activity in order to get a search warrant, but once they are searching a scene, they don’t need approval to seize money and items they believe are connected to crimes.

Donald Clark, an assistant U.S. attorney and spokesman for the U.S. Attorney’s office in Portland, declined to discuss the seizure.

Attempts to reach Mardigan, Nixon, DePaolo and Flynn were unsuccessful Monday.

Edward D. Murphy can be contacted at:

[email protected]

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