INDIAN TOWNSHIP – After years of murmurs and outright accusations of financial improprieties against him, former Passamaquoddy tribal Gov. Robert L. Newell was indicted Wednesday by federal prosecutors.

Newell, who most recently served as tribal governor at Indian Township from 2002 to 2006, faces 30 counts in the indictment. Also indicted on 21 similar charges is James J. Parisi Jr., 45, of Portland, who served as Indian Township’s finance director from 2003 to 2006, according to a prepared statement released Thursday by U.S. Attorney Paula Silsby.

The charges against both men include conspiracy to defraud the United States, misapplication of federal and tribal funds, making false statements and making fraudulent claims.

According to the indictment, the tribal government at Indian Township received more than $7 million in federal funds between Oct. 1, 2002, and Sept. 30, 2006. Of that amount, nearly $1.7 million was misapplied by Newell and Parisi for uses not allowed by federal law, the indictment indicates.

Among some of the improper uses of the funds were “honoraria” payments made to the governor, lieutenant governor, tribal council members and certain senior employees that were based on vacation time and paid in addition to their regular salaries, according to the indictment. The tribe did not withhold federal or state taxes from these “honoraria” payments or report the extra payments to the Internal Revenue Service, the document indicates.

Newell also is accused of approving in June 2004 a travel expense check of $1,020 for his son, who supposedly needed the funds to receive police training in Boston, even though he “knew that his son needed a loan and was not traveling to Boston,” the indictment indicated. Newell and Parisi also allegedly directed $33,000 in dedicated federal health care funds to pay costs the tribe incurred in getting a referendum question about a racino in Washington County on a statewide ballot.

Nine of the 30 counts each carry a maximum sentence of 10 years in prison while the remaining 21 counts each carry maximum terms of five years, according to the U.S. Attorney’s Office. The maximum fine for each count is $250,000.

When contacted by phone late Thursday afternoon, Newell’s wife, Katherine Newell, said her husband was not home and was not available for comment.

“His attorney has recommended that he not speak to the press,” she said.

Newell’s attorney, Matthew Erickson of Brewer, declined Thursday to comment. Parisi’s attorney, George Dilworth of Portland, said his client is innocent.

“Jim Parisi did not receive a penny from any of this alleged misconduct and is not guilty,” he said.

Dilworth said Parisi is not a Passamaquoddy but was hired for the position of the tribe’s finance director. He declined further comment.

Attempts Thursday to contact Indian Township Gov. Billy Nicholas, who replaced Newell as tribal governor in 2006, were unsuccessful.

The indictments come at least three years after some tribal members began to question publicly Newell’s bookkeeping practices. In March 2005, tribal members circulated a petition asking Newell to resign his post, accusing him of “irresponsible and reckless handling of tribal finances [and] no financial accountability.”

Accusations of mismanagement persisted through the rest of Newell’s term as governor and included allegations in August 2006 that he had illegally fired several tribal employees after they publicly questioned his leadership. Federal officials appeared at the reservation around the same time to look into the bookkeeping complaints, but Newell publicly denied he was the reason they were there.

One tribal member who did not want to be identified said Thursday that people on the reservation have been wondering what had happened with the investigation.

“I’m really glad they’re starting to do something about it,” she said.

The 29-page indictment includes details of dozens of monetary transfers and financing requests that allegedly were performed or submitted by Newell and sometimes with Parisi’s cooperation. Among the listed allegations is that Newell and Parisi funneled federal funds that should have been used for tribal health, housing and environmental programs directly to personnel costs for tribal council members who were not involved in those programs.

Hundreds of thousands of dollars that were meant to go to services at the Indian Township Health Center were directed improperly to tribal employees, according to the indictment.

“These ‘phantom’ or ‘ghost’ Health Center employees included certain tribal council members and members of Newell’s family,” the indictment says.

Newell and Parisi also are accused of improperly seeking $162,324 in federal health care expense reimbursements and $126,061 in federal environmental expense reimbursements for uses that were not permitted under federal law, namely for tribal employees whose personnel costs were not covered by those federal programs. Medicaid payments from the state totaling approximately $82,745 that were to go toward health expenses also were improperly labeled “revenue sharing” and diverted to a tribal government account, according to the indictment.

Checks totaling $290,000 were written from a tribal health services account as “loans” to other tribal expenses but only $61,000 of that money was repaid by the end of September 2006, the indictment indicates.

Some of the misapplied funds also allegedly were used to pay general assistance to tribal members “far in excess” of what the tribe had budgeted for general assistance, according to the document. It says the tribe budgeted $500,000 for general assistance in 2005 and 2006 and in each year overspent its general assistance budget by approximately $1 million.

At the end of September 2006, a few weeks after Newell most recently was voted out of office, the tribe had only $89,000 in cash or cash equivalents and all of that amount was collateral for a loan, according to the document. At that same time, the tribal government owed its programs more than $1 million, and those programs in turn owed more than $1.2 million in unpaid bills for goods and services, the document indicates.