A Norway man accused of having filed multiple fraudulent loan applications to gain over $240,000 from a pandemic-era loan program pleaded guilty to wire fraud charges Monday in the U.S. District Court in Portland.
Merton Weed Jr., 51, of Norway, Maine, was arrested in February on an indictment alleging he filed eight fraudulent Paycheck Protection Program (PPP) applications between May 2020 and Jan. 2021, receiving over $240,000 in Small Business Administration-backed loans.
The PPP applications allegedly listed false monthly payroll and employment data, as well as false bank records.
If convicted, Weed faces up to 20 years in prison, three years of supervised release and a $250,000 fine.
He will be sentenced by a federal district court judge after the completion of a presentence investigative report by the U.S. Probation Office.
The February indictment also charged Weed with filing a fraudulent application for a Federal Housing Administration (FHA) insured mortgage in 2018, allegedly having listed false employment and income information on the application.
Under Title 18, Section 1010 of the U.S. Criminal Code, it is a criminal offense “to make a willful false statement or misrepresentation to any Department or Agency of the United States as to any matter within its jurisdiction,” which includes the U.S. Department of Housing and Urban Development (HUD).
Making such a willful false statement can result in a $5,000 fine or a maximum prison sentence of two years, or both.
As part of the plea agreement reached Monday, Weed pleaded guilty to the four counts of wire fraud, while the fifth charge of HUD fraud related to the FHA loan was dropped, according to the U.S. Attorney’s Office for the District of Maine.
In Sept. 2019, Maine Senate President Troy Jackson obtained a similar FHA insured loan to purchase a home in Augusta.
As part of the loan application, President Jackson and his partner signed a mortgage document stating that they would make the Augusta property their “principal residence” for at least one year.
However, when submitting documentation in 2020 to the Maine Ethics Commission concerning his residency when running for reelection in Senate District 1, he listed his residence as Allagash.
Jackson has since stated that he “never really read” the mortgage document that he signed when purchasing the Augusta property.
Jackson wrote a letter on Sept. 29 to Maine Ethics Commission Executive Director Jonathan Wayne stating that the Augusta property was a “temporary place to stay during the week.”
“Allagash is my home and northern Aroostook County is my community. Not only is it the address on my license, where I vote in municipal and statewide elections, and where I receive my homestead property tax exemption, it is where I raised my kids, where my parents live and what I fight for every day in Augusta,” Jackson wrote.
In the memo, Wayne does recommends against any further investigation into whether the Senate President submitted false information to the Ethics Commission and violated the residency requirement when running for reelection.
“If the statements in Sen. Jackson’s preliminary response are correct, he has a convincing case to make that he remained a resident of Senate District 1, even if he occupied the Augusta property during the majority of September 2019 – September 2020,” Wayne wrote in the memo.
The jurisdiction of the Maine Ethics Commission is limited to investigating the conduct of legislators in their official duties, and will therefore not be undertaking an investigation into Jackson’s apparent misstatements on the mortgage document, allegations of insurance fraud, and his exorbitant use of travel reimbursement funds.
Wayne’s recommendation is not the final say on the matter — the issue is set to be taken up by the Ethics Commission during their meeting Wednesday.
Rep. Andrews, author of the original ethics complaint, told the Maine wire that “if Ethics doesn’t investigate, the State of Maine is saying, definitively, that Troy Jackson’s primary residence was in Allagash and not Augusta when he signed an FHA loan form stating that Augusta was his primary residence.”
“That’s a federal crime, and U.S. Attorney Darcie McElwee needs to investigate this to make sure that the rule of law still applies in Maine.”
The Federal Bureau of Investigation describes occupancy fraud, a type of mortgage application fraud, as occurring “when the borrower states on the application that they intend to live in the home they are buying when it’s actually an investment property.”
Mortgage records indicate that Jackson sold his Augusta home in 2021, for more than $100,000 what he paid for it.