Developer guilty of theft from Calais loan fund

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MACHIAS – A Washington County Superior Court jury returned 10 guilty verdicts on theft charges for a New Brunswick man who received a $100,000 loan from the city of Calais within two months of moving to the area in the summer of 2005.

James Schmidt, 59, faces several years in the Maine Department of Corrections for the felony convictions of three Class B charges and seven Class C charges.

Representing a New Brunswick foundation, Schmidt told city officials he was planning to redevelop a downtown building, but he spent the money on himself rather than making payments to workers.

His sentencing hearing is at least two months out, because District Attorney Michael Povich has asked for a pre-sentencing investigation into Schmidt’s past.

“The evidence compelled the verdict,” said Povich, who told the jury that this was only the third time in more than 30 years in Washington and Hancock counties that a jury was called in to finish up on a Saturday.

“It was all about following the paper trail.”

Schmidt has been in the Washington County Jail since his arrest last Nov. 2. He is being held there without bail, although his attorney, Jeffrey Davidson of Cutler, may ask for the bail issue to be reconsidered.

“[Schmidt] is now a severe flight risk,” Povich told Justice Joyce Wheeler. “He has every reason to flee. He has no roots, no reason to be here.”

The seven female and five male jurors endured a five-day trial, including jury selection last Tuesday that had them in the courtroom until after 6 p.m.

Through four days of testimony they heard from more than 30 witnesses, all but two for the prosecution. Povich also submitted 91 exhibits – numerous pages of bank statements – while the defense submitted another 15 exhibits.

The jury took 21/2 hours to find Schmidt guilty on all counts.

They heard about Schmidt’s plan to renovate a dilapidated downtown building at 419 Main St. in Calais for both retail and low-income housing, creating jobs for local workers in the meantime.

Within months of the project both starting and bogging down, Schmidt was charged with eight counts of theft by unauthorized taking. Each count represented a local business and individual who went unpaid for plumbing, electrical, demolition work and such.

Schmidt also faced one count each of theft by misapplication of property and negotiating a worthless instrument, or, writing more than $5,000 in bad checks. He repaid 18 of the 19 bad checks before his arrest last November.

The missing money amounted to more than $29,000, once $70,000 had gone to the building’s owner for the sale of the property.

Schmidt had taken $14,300 off the top for his salary, which had been approved by city officials within the business plan that he had presented them as part of his loan review.

Thousands more covered his personal expenses as he oversaw the work on the building – $6,165 for an extended stay at the International Motel; $4,110 for meals and $3,425 for his cellular phone bills.

There were also odd charges and checks for groceries and visits to the pizza parlor and the movies.

Povich maintained in both his opening and closing arguments that Schmidt was a “con man” working for a New Brunswick-based tribal foundation in name only.

Davidson argued that Schmidt was a businessman who learned about the city’s low-interest loan opportunity from the man who wanted to sell him the building.

Schmidt arrived in Calais in May 2005 and, while working for the Wantaqo’ti Foundation, arranged for the $100,000 loan by July 15.

When workers on the project complained to city offcials that their bills were going unpaid, the city turned to Sgt. David Randall of its police force to investigate the interloper.

“I want to publicly commend Sgt. Randall for the work he did on this case,” Povich said when the trial was over.

City officials grew suspect of Schmidt’s scheme when he went back to them in late August – six weeks after money appeared to be running low – with two more development plans that would hinge on the city providing about $200,000 more in financing.

The initial $21,000 that went for Schmidt’s salary and expenses, Povich noted, was “chump change” for a con man. He really was after the $300,000 he thought he could get from the city, Povich said.

“He thought he had a golden goose that he was going to milk for even more,” he said.

Davidson declined to comment after the trial because Schmidt’s sentencing hearing is pending.

Justice Wheeler thanked the jurors for taking five days to hear the trial, including giving up their Saturdays. She also commended both attorneys for a “well-argued, professionally presented” trial.