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Maine to recover $1.3M from Sewall after court ruling

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Maine to recover $1.3M from Sewall after court ruling

BATH — The state will recover $1.3 million in sales, gasoline and special fuel taxes that were diverted by former M.W. Sewall & Co. President Philip Sewall, according to Attorney General William J. Schneider's office.

The AG's office said Sewall was found guilty Wednesday in West Bath District Court on three counts of failure to pay the taxes collected, and that he was fined $2,000 on each count. The court ordered Sewall to pay $50,000 within 12 months, along with the $225,000 he has already paid to Maine Revenue Services.

"The agreement reached requires Philip Sewall to personally pay out a large amount of money to cover the unpaid taxes owed by the company and other assets are available to repay the state through the bankruptcy," Schneider said in the release. "The remaining companies of M.W. Sewall are under new leadership and can move forward. This is a good outcome for the citizens of Maine."

The family-owned company operated a heating oil delivery business and 11 service stations and convenience stores in the Mid-Coast region. Philip Sewall did not pay Maine Revenue Services the money collected as sales and fuel taxes from January to March 2009; instead, he used the funds to pay for his own compensation and other business expenses, the AG's office said in a press release.

The company filed for bankruptcy protection in March 2009 and its assets are in the process of being sold, according to the AG's office. The state is working with the bankruptcy trustee for the company to gather the remaining $1.06 million from the sale of company assets.

Philip Sewall was fired from M.W. Sewall in February 2010. Edward "Ned" Sewall III, president of the company from 1995 to 2007, offered about $4.7 million in April 2010 for the home heating oil operations of his family’s company. His top bid included $2.69 million that he said the company owed him after a buyout by his brothers, Philip and Mark, in 2007.

Alex Lear can be reached at 781-3661 ext. 113 or alear@theforecaster.net. Follow him on Twitter: @learics.