Russel Brace, former president of United Mid-Coast Charities (UMCC) in Camden, Maine, has been accused of embezzling $3.8 million from the nonprofit. He faces a civil suit from the organization, but he might have more bad news coming. According to an affidavit filed by Brace’s attorney Peter DeTroy, the ex-executive is the subject of a federal criminal investigation and charges are expected, though they have yet to be filed.
Early this month UMCC filed a civil suit against Brace “for theft and conversion of money from the Plaintiff by means of his misappropriation of third party donation checks to UMCC,” according to court documents. The suit alleges that between December of 2001 and August of this year, Brace deposited $3.8 million worth of the charity’s checks into an account for his business, Brace Management Group. A judge has reportedly placed liens for the same amount on Brace’s accounts.
The affidavit filed by DeTroy early this week seeks a 60-day stay on the civil suit. It states that the U.S. Attorney’s office for the District of Maine is launching a criminal investigation into Brace, and “criminal charges are anticipated.” DeTroy argues in the affidavit that civil proceedings would jeopardize Brace’s Fifth Amendment rights against self-incrimination during criminal proceedings.
“The discovery process (in the civil suit) will undoubtedly require Mr. Brace to sign sworn statements, answer interrogatories and be deposed — all of which have the potential to jeopardize a civil defendant’s Fifth Amendment rights in a related criminal proceeding,” wrote DeTroy. According to the affidavit, UMCC’s attorney “does not oppose the requested stay.”
Further, the affidavit contends that a stay would avoid duplicative litigation, and “if the government successfully prosecutes the criminal matter, restitution requirements may render this case moot,” wrote DeTroy.
The suit alleges that Brace admitted his theft to UMCC in December. Brace had been the organization’s volunteer president since 1997. According to the suit, “The amounts of the donation checks stolen and converted by Brace typically were in the amount of thousands of dollars,” but some were as much as $200,000. The suit seeks at least $3.8 million, plus costs.
“We recently discovered that UMCC has been the victim of substantial embezzlement of donations by its former president, Russell (Rusty) Brace,” said UMCC President Steve Crane via a statement on the organization’s website. “We have engaged an attorney; and law enforcement authorities, including the FBI, have been notified. We are working with local banks to determine the full extent of the missing funds. We also have begun the legal process to recover the money that rightfully belongs to UMCC for its charitable giving.”
UMCC’s total revenue added up to $307,814 in 2012, according to its most recently filed Form 990. In that year it paid out $330,787 worth of grants to local organizations, and other expenses to the tune of $106,362 put the organization more than $125,000 in the red. Crane said in the statement that the discovery of Brace’s fraud does not change the charity’s plans to distribute $325,000 this year.