Prosecutors present case against Meridian contractors

Business partners Elaine Martin and Darrell Swigert are accused of hiding assets and filing false tax returns.

jsowell@idahostatesman.comAugust 14, 2013 

Darrell Swigert

Mark Webb bought some used guardrail for his Declo dairy farm in 2007. He wrote a check to MarCon Inc., a Meridian construction company, for $2,087.

The check, endorsed by company president and majority shareholder Elaine Martin, didn’t go into the company’s business account at Wells Fargo Bank. Instead, the U.S. government alleges, Martin placed the money into a slush fund at Bank of the Cascades and doled it out to herself and other shareholders.

Several buyers of used guardrail testified Wednesday in U.S. District Court in Boise on the third day of a trial that’s expected to go on for at least three weeks.

The Internal Revenue Service started investigating the company in 2007 after an ex-employee told authorities that not all of MarCon’s revenues were being reported. Only then was the slush account discovered.

In court Wednesday, Webb and other customers were shown copies of their canceled checks written to MarCon for used guardrails and posts but endorsed by Martin personally, not for deposit into the business’s account.

Martin, of Meridian, is charged with conspiracy, mail fraud, wire fraud, filing false tax returns and obstruction of justice. Co-defendant Darrell Swigert of Boise, a minority shareholder in MarCon, is charged with obstructing and conspiring to obstruct a federal criminal proceeding. Swigert is the founder of the Swigert Foundation, a group that promotes youth hockey. He owns the Idaho Junior Steelheads, a team of 16-to-20-year-olds based in McCall that plays several teams from California and Arizona.

Both defendants have denied any wrongdoing.

Martin is accused of hiding assets to make it appear her net worth was far less than it actually was. She created dummy corporations that allowed her to continue to control her assets while making it seem they were owned by someone else, the U.S. Attorney’s Office alleges.

Shrinking her net worth allowed Martin to qualify for programs from the Small Business Administration and the U.S. Department of Transportation that helped “small disadvantaged” companies develop the ability to compete with larger companies. The Department of Transportation, for example, earmarks 10 percent of its funds for highway and transit assistance for disadvantaged businesses.

The government is seeking $9.3 million in restitution for highway construction projects MarCon was awarded in Idaho and Utah.

In one of its most prominent projects, MarCon provided the barriers erected for the Flying Wye project connecting Downtown Boise with Interstate 84.

In court on Wednesday, a juror was removed without explanation after Judge B. Lynn Winmill cleared the courtroom and conducted a private hearing with the lawyers on each side and the juror. When court reconvened, Winmill admonished jurors to not talk about the case among themselves or outside the courtroom.

John Sowell: 377-6423, Twitter: @IDS_Sowell

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