NORWAY — A former Harrison woman sentenced to three and a half years in prison in May 2011 for defrauding the MaineCare program of millions of dollars was released last month into “supervised community confinement.”

Dawn Solomon, 44, reportedly is living in Norway.

Charged in 2010 with theft by deception, she pleaded guilty to defrauding the state’s low-income health insurance program of about $4 million and was sentenced to 42 months in prison to be followed by three years of probation.

About 16 months after being remanded to the Maine Correctional Center in Windham, Solomon arrived back in Norway.

She can serve her remaining prison time, about 26 months, under supervised community confinement, as long as there is “no failure.” Probation and Parole Officer Wayne Sturdivant said she must seek and maintain employment and must pay the court-ordered restitution of $4 million (through a payment agreement with the state).

The program means she “is a prisoner in the community,” Sturdivant said. “Her residence must be approved, any out-of-community travel must be approved and she cannot leave the state.”

The program is for nonviolent criminals because it is much cheaper than keeping them in prison, Sturdivant said.

Under the terms of her release, Solomon must check in with her probation officer (Sturdivant), who is to make home visits. She can have only preapproved visitors and she cannot drink alcohol or have illegal drugs.

She could get time off for good behavior under the program or complete her full sentence. However long she is under supervised community confinement, she will also serve three years probation upon completion of her confinement.

Assistant Attorney General Michael Miller was surprised to learn Monday that Solomon was out of prison but declined to comment “at this time” on further state or federal charges, including tax evasion. She also declined to comment on Dawn’s husband, Harvey Solomon, who has not been charged in the fraud.

On July 13, 2010, the FBI, agents from the Office of the Maine Attorney General, Maine State Police and the Oxford County Sheriff’s Office were joined by agents from the Office of the U.S. Inspector General, Health and Human Services division, in executing a search warrant at 172 and 180 Main Street, seizing what appeared to be boxes of records and other documents.

Miller said Dawn Solomon admitted to overbilling, submitting false reports to the state for reimbursement through LINC, the Living Independence Network Corp. The evidence was seized at the LINC office and other Solomon-controlled businesses nearby on Main Street, Miller said.

In 2006, Miller said, Solomon was paid an average of $87,000 per month. In 2007, she was overpaid $107,000 in the average month and $134,000 too much monthly in 2008. Total overpayment is in the $4 million range.

Some of the artifices used included having relatives on the company payroll, including a $105,000 annual salary to a person who had no duties at all in any of the businesses. In other instances, Miller said, people whose hours were billed for care of children were actually performing maintenance and other unrelated tasks at various Solomon properties.

Solomon owned several other companies, including Opal Consulting LLC, which trained in alternative healing; New Horizon Capital Investment, a real estate holding company; and Infinite Horizons Inc., a case management services company.

Solomon was booked at the Oxford County Jail after her plea, then released on $10,000 unsecured bail. At a February 2011 hearing, Miller and Solomon’s attorney, Jay P. McCloskey, presented arguments on the length of time Solomon would be incarcerated. The court agreed to a basic sentence of eight years.

Prosecution and defense agreed that all but 42 months would be suspended. Solomon would also serve three years on probation, during which any violations could send her back to prison for the full term. Sentencing was May 5, 2011, and she began serving her sentence in June.

Also on May 5, 2011, Solomon filed a Chapter 7 bankruptcy action claiming $1.78 million in secured debts and $63,500 in unsecured debts. She was granted Chapter 7 bankruptcy relief on Aug. 15.

She also has filed for bankruptcy for her real estate holding company, New Horizons Investment LLC. She owed more than $1.8 million in secured and unsecured debts, according to her attorney, Jeffrey P. White of Portland.

“The lenders have filed foreclosures on the properties they hold as collateral,” he said. “All other legal action has been stayed by the bankruptcy.”

The Solomons and the company owned a dozen or so properties in the Norway-Paris area, including a $1 million lake-shore property in Harrison that went on the auction block in August 2011.

The property was one of 10 owned by Solomon in Norway, Paris and Harrison that went to lender-ordered auctions since March 2011. Each property was listed under the ownership of either Dawn Solomon, Dawn and Harvey Solomon, Dawn Cummings (her maiden name) or New Horizons Capital Investment LLC.