Newell given five years for fraud offenses

Robert Newell, the former governor of the Passamaquoddy Tribe at Indian Township, was sentenced on April 24 to five years in prison for conspiring to defraud the United States and other offenses committed while serving as tribal governor from 2002 to 2006. Newell, 65, was sentenced by U.S. District Judge George Singal in U.S. District Court in Bangor. He was also ordered to serve a three-year term of supervised release upon his release from prison and ordered to pay restitution in the amount of $1,741,876 to the victims in the case.

Newell is appealing his conviction to the First Circuit Court of Appeals, arguing that, under the Maine Indian Claims Settlement Act, the U.S. government does not have criminal jurisdiction over Passamaquoddy territory. His request, though, for a stay of execution of his sentence pending the appeal was denied on May 5. Newell is currently free on bail until May 27, when he must report to federal prison.

The U.S. Attorney's office, which prosecuted the case, had argued for a sentence nearer to 15 years, the applicable guideline range. The attorneys argued that Newell's period as governor "was marred by corruption and greed and caused 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 tribe and federal agencies, but he also ruined many lives, caused emotional and financial harm to several tribal members and caused unmeasurable harm to the tribe's reputation and standing in Maine. He also caused harm by jeopardizing future funding from federal agencies. The defendant deserves a long prison term to protect the tribe, the federal government and his political enemies."

Newell's attorney, Matthew Erickson of Bangor, had argued for a sentence that involved probation or home detention. He noted that the sentence sought by the U.S. Attorney's office would be "tantamount to a life sentence" for Newell. Erickson stated, "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."

As tribal governor, Erickson stated, Newell "believed he had a better understanding of what his people needed than did a federal bureaucrat in Nashville. Of the $1.8 million the government argues is the loss in this case, virtually all of the money went to other tribal members, in salary, in assistance and in services. The people who benefitted from this money are exactly the same people who the government lists as victims, including people like Governor William Nicholas, Elizabeth Neptune and others who viewed Mr. Newell as a political enemy."

According to U.S. Attorney Paula Silsby, Newell was convicted of conspiring with James Parisi Jr. of Portland, the director of finance at the tribe from 2003 to 2006, to misapply more than $1.7 million in restricted federal funds awarded to Indian Township for its tribal programs. Three days after Newell was sentenced, Parisi, 47, was sentenced to 12 months and a day in prison and was also ordered by Judge Singal to serve a three-year term of supervised release upon his release from prison, pay restitution in the amount of $1,602,516 and special assessments totaling $1,100.

After a trial that lasted nearly three weeks, Newell was convicted on November 20, 2008, on 29 counts, including conspiracy to defraud the United States, misapplication of tribal government funds, misapplication of health care benefit program funds, making false statements to a U.S. government agency and submitting false claims to a U.S. agency. Parisi was convicted on one count of making a false statement to a U.S. agency, four counts of submitting false claims to a U.S. agency, two counts of misapplying tribal government funds and three counts of misapplying funds of a health care benefit program.

The funding included more than $800,000 from the Bureau of Indian Affairs and approximately $500,000 from the U.S. Department of Health and Human Services. Other funding agencies victimized by Newell included the U.S. Department of Housing and Urban Development, the U.S. Environmental Protection Agency, the U.S. Department of Justice COPS Program and the State of Maine.

Silsby stated that Newell used some of the restricted funds for the benefit of himself and some family members. However, most of the federal funds diverted by Newell went to pay general assistance to tribal members. Newell paid approximately $1.6 million in general assistance to tribal members during 2006, his last year in office. Newell also used funds awarded to the tribe's Indian Health Center, the substance abuse and HIV prevention program, and the Environmental Department to pay individuals who did not work for those programs, including one of Newell's sons, a niece, and several tribal council members. In 2006, Newell also diverted tribal government employee retirement account funds, affecting more than 50 tribal employees.