MACHIAS – The prosecutor Wednesday called a 59-year-old Riverview, New Brunswick, man who allegedly bilked the city of Calais out of thousands of dollars a “con artist” and “flimflam man.”
But James Schmidt’s attorney, Jeffrey Davidson of Cutler, put the city on trial in Washington County Superior Court, saying Calais was the victim of mistakes by city officials including economic development director Jim Porter and city solicitor David Fletcher. He said the city needed a “fall guy.”
“Is James Schmidt a con man or is this about politics to save heat from people in Calais?” Davidson asked during the opening of the jury trial in front of Superior Court Justice Joyce Wheeler.
Schmidt, who was arrested in November 2005, has been in jail ever since. Among the charges he faces are eight counts of theft by unauthorized taking and one count each of theft by misapplication of property and negotiating a worthless instrument after he allegedly stole $30,000 from the city’s revolving loan fund.
Schmidt had been hired by the Mi’kmaq Tribe in Newfoundland as director for the Wantaqo’ti Foundation, but is no longer employed by that foundation. The foundation was set up to help American Indians and others.
At issue is the $100,000 the district attorney says Schmidt borrowed from the city’s Economic Development Loan Fund to renovate a historic building at 419 Main St. owned at one time by David Rier of Jonesport. Schmidt’s attorney says the loan was to the foundation, not Schmidt. Of that amount $70,000 was to be used to purchase the building, $30,000 to renovate it. Another $40,000 was supposed to come from the foundation.
Once completed, the building was to be used for retail businesses and upstairs apartments.
The renovations were never completed and in September 2005, police investigated.
Schmidt was accused of failing to pay thousands of dollars to contractors and failing to pay a local motel where he was staying, a drugstore and a grocery store. It also is alleged that several checks Schmidt wrote on a local bank bounced.
District Attorney Michael Povich said that $14,000 of the $30,000 from the loan fund that was supposed to be paid to vendors and contractors was sent to Schmidt’s girlfriend in Canada, while checks paid to contractors were returned marked “insufficient funds.” In September, the bank closed Schmidt’s account
But Davidson maintained that Schmidt was allowed a salary under the terms of the agreement. Under cross-examination by Davidson, Porter said he was unaware Schmidt was paying himself with city funds. Davidson then showed Porter the business plan Schmidt had submitted that showed the project director’s salary of $48,000 a year, or $4,000 a month. “I had no knowledge he was going to take a salary,” Porter said.
Porter testified he had met Schmidt through Rier. He said Schmidt was interested in the city’s loan fund. The fund was set up years ago through grants and was designed to create jobs.
The loan was approved on June 30, 2005, and on July 11, the Wantaqo’ti Foundation was incorporated in Delaware. Four days later the sale went through. The district attorney said Schmidt was the sole registered agent for the corporation.
Porter said the city solicitor researched the foundation and found nothing wrong. He said Schmidt submitted a week-by-week work schedule and payment plan. He said the agreement called for the city to advance Schmidt the money for a week’s work and Porter was to inspect to make sure it was done. The expectation was that Schmidt was paying the contractors out of city loan funds.
Porter said renovations were progressing, but several weeks into the project he became concerned because it appeared the work had “bogged” down. He said Schmidt said the delays were because the “workers were slow.”
Porter said he paid Schmidt the final installment so Schmidt could begin making payments on the loan. When Schmidt failed to make the payments they went to see the city attorney. He said Schmidt assured them he was getting money from the foundation. In the end, the city never received any loan payments.
The trial continues today.