Former governor at Indian Township indicted

Former Indian Township Passamaquoddy Governor Robert Newell was indicted on March 20 by a federal grand jury in a 30-count indictment that charges a conspiracy resulting in the misapplication of approximately $1.7 million in federal funds that had been awarded to the tribe for the benefit of its tribal programs.

Newell, 64, was charged with one count of conspiracy to defraud and to commit offenses against the United States, three counts of intentionally misapplying tribal government funds, six counts of intentionally misapplying funds of a health care benefit program, three counts of making false statements in a matter within the jurisdiction of a U.S. government agency, and 17 counts of submitting false claims to the government, according to a release from U.S. Attorney Paula Silsby. Newell served as governor at Indian Township from September 2002 to September 2006 and previously had served twice as governor at Indian Township and once at Pleasant Point.

James Parisi Jr., 45, of Portland, who was the finance director at Indian Township from 2003 to 2006, was also charged as a co-conspirator and co-defendant in 21 of the 30 counts, including conspiracy, 11 false claim counts, two counts of misapplying tribal government funds, six counts of misapplying health care benefit program funds and one false statement charge.

Richard Phillips Doyle, the Passamaquoddy chief at Pleasant Point, says the financial problems resulting at Indian Township, through any misapplication of federal funding, will not have any effect on the Pleasant Point tribal government. He isn't aware of the financial issues affecting any Joint Tribal Council funds either.

According to the indictment, the misapplied funds were used, in part, to benefit Newell and his family, certain tribal council members and to pay general assistance for tribal members far in excess of what was budgeted. The indictment alleges that Newell directed Finance Director Parisi and others to charge the salaries of certain tribal government employees to the payroll of the health center and the tribal government's environmental department, knowing that those people were not employees of either the health center or the environmental department. Newell also is alleged to have directed Parisi and others to make and submit false claims for reimbursement that included the salaries of individuals who were not employees of the Wonahkik Program, the tribe's substance abuse and HIV prevention program, or full-time employees of the environmental department. The improper charges to health center funding sources and Environmental Protection Agency grants totaled approximately $428,000.

Newell is alleged to have directed others to issue checks to himself and family members out of tribal program bank accounts based on requests for approval for travel that he knew were false and requisitions for payment that were not allowable costs of the tribal program to which they were charged. The diversion to the tribal government of approximately $82,745 in Medicaid reimbursement checks from the state is also alleged. Tribal bookkeepers were directed by Newell and Parisi to pay for tribal government expenses in violation of federal contracts and grants, and funds from the tribal employees' retirement fund were diverted to the tribal government, the indictment charges. Newell also directed Parisi and others to transfer federal program funds out of a tribal bank account at The First and out of tribal program accounts to tribal government accounts in excess of what the tribal programs owed. By September 30, 2006, the tribal government owed the tribal programs in excess of $1.2 million in federal funds improperly transferred to the tribal government. The indictment states that, as of that date, the tribe had only $89,000 in cash, "all of which was collateral for a loan, while the tribal government owed the tribal programs more than $1 million. In addition, tribal programs owed more than $1.2 million for unpaid bills for goods and services provided to those tribal programs.

The indictment charges that Newell attempted to conceal the misapplication of federal funds by terminating and threatening to terminate tribal employees who publicly protested the actions.

Among the specific allegations are that Newell directed the payment of "honoraria" to himself, the lieutenant governor, tribal council members and certain senior tribal employees. Taxes were not withheld on the payments, and they were not reported to the Internal Revenue Service. In 2005 and 2006, because the tribal government's administrative expense, general assistance payments and honoraria payments far exceeded the tribal government's revenues, Newell and Parisi diverted federal funds from tribal programs to pay tribal government expenses. The tribal government overspent its $500,000 general assistance budget by approximately $1 million.

Nine of the 30 counts carry a maximum jail term of 10 years in prison on each count. The remaining 21 counts carry a maximum jail term of five years in prison on each count. The maximum fine is $250,000 per count. The defendants' first court appearance has not yet been set by the court.

The matter was investigated by investigators from the U.S. Department of Interior, U.S. Department of Justice, U.S. Department of Health and Human Services, U.S. Department of Housing and Urban Development, U.S. Environmental Protection Agency, U.S. Department of Labor, Employee Benefits Security Administration, and U.S. Attorney's Office.