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Former Passamaquoddy leader gets 5-year sentence

BANGOR, Maine – The former governor of the Passamaquoddy Tribe at Indian Township was sentenced to five years in prison and ordered to pay $1.74 million in restitution for his misuse of tribal and federal funds during his administration from 2002 to 2006.

Robert Newell, 63, was sentenced April 24 by U.S. District Court Judge Z. George Singal. Newell was convicted following a three-week trial last November on 29 of 30 counts of conspiracy to defraud and violate the U.S. government by intentionally misapplying federal funds, making false statements and submitting false claims to the federal government.

Singal also sentenced the former governor to three years of supervision following the completion of his sentence. He remains free on bail until May 27 when he will begin his prison sentence.

Three days later, on Monday, April 27, Singal sentenced James J. Parisi Jr., 45, of Portland, Maine, the Passamaquoddy Tribe’s former finance director, to one year and one day in federal prison and ordered him to pay $1.62 million in restitution for his role in the misuse of tribal and federal funds during Newell’s governorship. He also sentenced Parisi to three years of supervised release following his prison sentence.

Parisi, who is not a tribal member, was a co-defendant in Newell’s three-week trial last fall. He was convicted on 11 of 21 counts of conspiracy and misuse of funds. Parisi also must report to federal prison May 27, Singal denied a motion that Parisi be allowed to remain free pending his appeal to the U.S. 1st Circuit Court of Appeals in Boston.

Newell and Parisi were indicted in March 2008 following a three-year investigation by the U.S. Attorney’s Office for the District of Maine.

Assistant U.S. Attorney James W. Chapman, who was assigned to the case, said the investigation was launched based on complaints from tribal members.

According to the indictment that led to the two men’s convictions, the tribe received $7 million in program funds from the federal departments of Health and Human Services, Housing and Urban Development, Justice, Interior, and the Environmental Protection Agency from September 2003 through September 2006, Newell and Parisi misapplied approximately $1.7 million for uses not permitted by federal law. The indictment also said the two men diverted funds from the tribal employees’ retirement fund.

Among the findings was that Newell and Parisi, paid “honoraria” to the governor, lieutenant governor, tribal council members and “certain senior tribal employees” without withholding federal and state taxes and the payments were not reported to the Internal Revenue Service.

According to the indictment, Newell directed Parisi and others to charge the salaries of certain tribal government employees and Newell’s family members to the payroll of the tribe’s health center and environmental department, creating “phantom” or “ghost” employees.

The indictment detailed dozens of instances in which money was diverted from the federal programs into tribal government bank accounts to pay tribal government expenses, ultimately leaving the tribe stripped of funds.

The federal judge ordered a much more lenient sentence in Newell’s case than is provided in federal guidelines, which require a sentence of 12 to 15 years.

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Newell’s defense attorney, Matthew Erikson of Bangor, asked the court to “consider a sentence that involves probation or home detention.”

In arguing for a minimum sentence, Erikson cited Newell’s “lifetime of service to his community,” his “spotless criminal history,” his poor health, and the fact that he and his wife are raising two small grandchildren.

Erikson also argued that Newell did not use the money for himself, but spent it to help tribal members.

“Many of Mr. Newell’s problems stem from his mistaken belief that, as the chief of the Passamaquoddy Tribe at Indian Township, his role as both the chief executive and his expanded role as the father of the tribe gave him the power to administer the federal money as he saw fit, so long as the tribal council members approved,” Erikson said.

Chapman had recommended a sentence “at the high end” of the 15-year federal guideline in his sentencing memorandum.

“The defendant’s four-year reign was marred by corruption and greed and caused a great harm to the Passamaquoddy Tribe and its people from which they will not be able to recover for many years. He not only defrauded the tribes and federal agencies, but he also ruined many lives, caused emotional and financial harm to several tribal members, and caused immeasurable harm to the tribe’s reputation and standing in Maine. He also caused harm by jeopardizing future funding from federal agencies,” Chapman wrote.

Although Newell’s five-year sentence was less than he recommended, Chapman thinks it will work.

“I think his sentence is lengthy enough so that it will send a strong message to others in his position or other state and local executives receiving federal funds that they need to follow the guidelines and contract terms.”

Chapman said Parisi’s sentence was important in terms of deterrence.

“His defense all along was that he just did what he was told and I don’t want other people in that position – other finance directors elsewhere – to think, ‘Well, what can happen to me if I’m just doing what I’m told?’ The threat of a significant jail sentence should give them the courage to say, ‘I’m not going to participate in this.’”

The Newell/Parisi case has triggered inquiries from other tribes.

“We were contacted by tribal members out West. I really can’t get into too much detail. I don’t want to name the tribes or their allegations, but I can tell you that the publicity surrounding this case, especially the convictions and, hopefully, the sentences, have given hope to tribal members in other tribes where they think their leadership is violating the law and not spending federal funds in accordance with the contract restrictions.”

Chapman said he referred the callers to an agent in the Newell case “and they’re going to speak to the counterparts out in those districts.”