FORT KENT – The state and federal governments have served notice that they want a piece of the estate of a town office manager who embezzled $500,000 in excise taxes before committing suicide five years ago.

The struggle – now before a probate judge – pits the revenuers against the town, which wants its excise taxes back.

Marilyn Deschaine had been a town employee for almost 30 years and was supervisor of the town office staff on May 10, 1997, when she jumped off the Fish River Bridge at Fort Kent Mills. Her body was recovered more than a week later.

Investigators concluded that she embezzled more than $508,000 from the town and left an estate worth more than $700,000, according to court records after her death. That included $496,260 in investments and real estate appraised at $218,796.

To date, the town of Fort Kent has received $50,000 from the Hartford Insurance Co. for the embezzlement and $179,845 last December from Deschaine’s estate.

The town’s claim, according to audited reports filed with the courts, is for $508,000, the amount embezzled over a seven-year period from Jan 1, 1990, until Deschaine’s death.

After Deschaine’s death, the town paid $51,870 in audit and legal fees attributable to its claim against her estate.

Now the state and federal governments are making a claim, competing with the town for the remainder of the estate, according to Deschaine’s personal representative. “Personal representative” is the term used in Maine for executor.

Gary A. Severson, a Houlton attorney who is Deschaine’s personal representative, said Tuesday that the state, through the Attorney General’s Office, has already filed its claim. And he expects to hear from the federal Internal Revenue Service after the annual April crunch over income taxes.

According to Robert Michaud, a Fort Kent attorney retained by the town, the IRS and state of Maine claims are for taxes on income that Deschaine never declared.

“The money embezzled by Deschaine became income,” Michaud said. “Once it was known, the IRS and state [wanted] their share, including interest and penalties, because the income was not previously declared.

“It does not matter that the money belonged to the town, and that it was tax money to start of with,” he said. “It becomes income once it was embezzled.”

Severson said the real question to be decided would be who has priority, the town or the tax people.

“It’s big when you include interest and penalties for 10 years,” Severson said Tuesday.

“The town still has a sizable claim against the estate,” Severson said. “Actually, the town’s claim is larger than the available funds in the estate.”

Severson would not say how much money is left in Deschaine’s estate. He did not have figures readily available for the amount of money involved in the claims by the state and federal government.

The town learned of the state’s claim against Deschaine’s estate last month in a letter from Severson. In the letter to Stanley W. Piecuch, assistant attorney general for Maine, Severson disallowed a claim for income taxes, penalties and interest.

In the same letter, Severson said he filed several years’ worth of amended income tax forms, which included the embezzled funds, to both the state and federal governments.

“The Town of Fort Kent, from where the funds were embezzled, did file a claim which was litigated in Probate and Superior Courts, resulting in a judgment in favor of the town for an amount in excess of the net probate estate,” Severson wrote.

Because the three claims will be much higher than the value of the remaining estate, Severson said, he will place all claims before Probate Court and request instructions on whom should be paid and how much.

Severson said there was no timetable for all this to occur.