NORTHPORT – Federal agents swooped down on a local selectman’s home Thursday, charging him with running a midcoast marijuana-selling operation in the mid-1990s and laundering more than $500,000 in income to evade taxes.

The 170-count indictment says Kevin R. Hall, 45, used drug money to invest in cars, motorcycles, construction equipment and mutual funds.

Federal agents and Waldo County sheriff’s deputies arrived at Hall’s Priest Road home at 7 a.m. Thursday to serve an arrest warrant. Hall offered no resistance, Assistant U.S. Attorney Helene Kazanjian said.

Hall, 45, was charged with one count of conspiracy to distribute and possession with intent to distribute marijuana, four counts of willfully attempting to evade federal income taxes for the years 1995 through 1998, 163 counts of money laundering and two forfeiture of property counts.

Hall was taken to Portland where he entered a not guilty plea in U.S. District Court. He was placed in custody and a bail hearing was set for 3 p.m. Tuesday, April 2.

“We expect he will be released on bail,” said Augusta attorney Walter McKee, who is representing Hall.

Hall, owner of Fire Island Construction, has served three terms on the Board of Selectmen and recently sent notices to residents informing them of his re-election plans and asking for their vote. The town election will be May 6.

The 170-count indictment was obtained from a federal grand jury in Portland by U.S. Attorney Paula Silsby and Eileen O’Connor, a tax division lawyer with the U.S. Department of Justice.

Federal authorities allege that Hall was a big-time marijuana dealer during the mid-to-late 1990s and filed false tax returns omitting “substantial amounts of taxable income and taxes due” during that period.

O’Connor charged that tax returns filed by Hall for the years 1995 to 1998 reported taxable income of $10,931, $9,762, $18,026 and $30,873, respectively. The government charged that Hall omitted more than $500,000 of taxable income over those years and attempted to evade approximately $168,000 in federal taxes.

The indictment alleged that Hall attempted to launder his drug proceeds by “engaging in numerous financial transactions with his drug proceeds knowing that the transactions were designed in whole and in part to conceal and disguise the nature, location, source, ownership and control of the proceeds.”

The government also claimed that because certain properties owned by Hall were purchased with drug money or were involved in money-laundering activity, they are subject to forfeiture.

Silsby said the government will try to force Hall to forfeit cash and property, including automobiles and motorcycles, several pieces of construction equipment, mutual funds and a portion of Hall’s interest in four pieces of real property.

Kazanjian acknowledged that Hall would have to be convicted of the charges before the government could force him to forfeit his property.

McKee said the government had been “trying for years” to mount a case against his client. He said the government grouped a number of transactions to “make it look like this indictment is worse than it is.” He said the case centers around a few key charges and that Hall is committed to proving his innocence.

“He vehemently denies each and every one of these 170 charges and we look forward to going to trial,” said McKee. “There are multiple battles to be waged in what will be a hard-fought war. It will be a huge battle.”

Hall’s arrest came three years after Maine Drug Enforcement Agency investigators found marijuana, drug paraphernalia and business records during a search of Hall’s Waldo County home. Federal drug and revenue agencies were drawn into the case before the Feb. 19, 1999, search, according to authorities.

“This sort of melded into a federal investigation as a result of the state investigation,” said Kazanjian. “We work very closely with MDEA.”

Besides drug and financial information, that search also uncovered $17,111 in cash, some of which Hall contended consisted of rare coins and currency valued at more than $200,000. The inventory of items confiscated during the search identified the face value of the confiscated cash, but made no indication that the coins and currency were rare collectibles.

Hall has a lawsuit against the state over the rare coins that is expected to go to trial later this year. In it, Hall contends the state took possession of his rare coins and currency and failed to return the items when requested.

The state sent Hall a check for the face value of the money taken during the search but not the actual items. He returned the check. The state has denied that its agents switched the coins and currency after leaving Hall’s home with the evidence.

To obtain their 1999 search warrant against Hall, state drug agents submitted affidavits tracing a history of his alleged drug involvement dating to 1991 when he lived in Wilton and was thought to be a member of the Exiles motorcycle gang. The information came from drug users and informants.

McKee has contended all along that the search of Hall’s home was illegal. A ruling on the legality of the search is pending.

Informants told the agents that Hall was a major marijuana dealer who sold multiple pounds of marijuana at a time. One informant told police she had accompanied Hall on his marijuana delivery route through the Belfast area. Another informant said Hall supplied Rockland-area drug dealers with large quantities of marijuana.

An informant told the agents about a Camden drug dealer who told her in January 1999 that she stored 100 pounds of marijuana in her home freezer for Hall. She told the informant that the marijuana was worth more than $200,000. The informant told police she accompanied the woman when she secured $20,000 in a safety deposit box in a Rockland bank.

Based on the information supplied by the various informants, police went to Hall’s home and removed a bag of trash set by the side of the road. When they searched the trash they found marijuana residue and the phone number of a known drug dealer.

After conducting a search and removing the drug evidence and cash, the state agents impounded its search warrants. It took Hall’s attorneys well over a year to unseal the information contained in the warrant. One month after the warrant was unsealed, Hall filed suit against the state over the confiscation of his rare coins and currency.

“Rare coins? That doesn’t have anything do to with us,” Kazanjian said of the coin and currency controversy.

Silsby and O’Connor praised the investigation conducted by the Internal Revenue Service, Criminal Investigation Division and the MDEA in their announcement of Hall’s arrest.

The drug-dealing count carries a maximum penalty of 40 years in prison and fines of up to $2 million. Each of the money-laundering counts carries a maximum penalty of 10 years in prison and a fine of up to $250,000. The four tax-evasion offenses carry a maximum penalty of five years in prison on each count and fines of up to $250,000.