CAMDEN, Maine — Former United Mid-Coast Charities board president Russell “Rusty” Brace has stolen $3.8 million from the charity since 2001, the organization stated in a civil lawsuit filed Friday. The suit further indicates that Brace admitted to stealing donations when confronted by board members last week.
United Mid-Coast Charities filed the lawsuit in Knox County Superior Court.
The organization also asked the court to place liens on Brace’s properties without a hearing out of concern that he might try to hide assets. But Justice Daniel Billings rejected that request. The judge stated that the organization already had stated publicly in a Bangor Daily News article that it would seek to have liens placed on his property, thus eliminating the element of surprise.
The organization still can seek to have the court attach liens on Brace’s properties but it must first serve him paperwork notifying him of its request before a hearing can be scheduled.
Brace has not been charged with a crime, but the current president of the organization has said that law enforcement authorities, including the FBI, have been contacted to investigate.
Brace has not returned repeated telephone messages left this week by the BDN at his homes in Rockport and Rangeley.
Brace served as the volunteer board president of United Mid-Coast Charities from 1997 until Aug. 20 when he stepped down and the board appointed Stephen Crane as his replacement.
Crane stated in an affidavit filed in court that on Sept. 20 he spoke with one of the larger donors to the organization. The donor, who is not named in the lawsuit, stated that he recently had made three large donations totaling $75,000. Crane said that there were no records of those donations in United Mid-Coast Charities financial records.
The donor showed Crane the canceled checks and each had been deposited by Brace into another account at The First, N.A. bank, according to court documents. Crane stated in the affidavit that the charity had no account at that bank.
On Sept. 23, Crane and newly elected board treasurer Eric Belley met with Daniel Daigneault, president and chief executive officer of The First bank. The bank president showed the two men a list of checks made payable to the charity that were initialed by Brace and deposited into his Brace Management account at The First, according to the affidavit.
The lawsuit states that the checks dated to December 2001 and totaled $3,803,000.
It further states that two days later, Crane and Belley met with Brace, who admitted he had stolen the donation checks for his personal use.
Among the checks that he illegally converted for his own use was one for $100,000 and another for $200,000, according to court documents.
The lawsuit against Brace by United Mid-Coast Charities points out that Brace’s role as board president included receiving large donations which were intended to benefit other agencies in Knox and Waldo counties.
The organization is represented by attorney Jay McCloskey of Portland.
United Mid-Coast Charities, which was formed in 1942, has an all-volunteer board that could have as many as 45 members although it now lists 43 members. The officers of the board form an executive committee.
The income tax filings of United Mid-Coast Charities for 2012 show that it also paid KAX Office Center, while it was under Brace’s ownership, $48,000 for services that year. A review of earlier years showed similar payments made each year to KAX.
Brace sold KAX earlier this year.
United Mid-Coast Charities raised $3.9 million from 2004 through 2012, according to IRS filings signed by Brace. During that time, the charity gave out $2.8 million. Some of the money was set aside in an endowment fund to pay for operating expenses.
In 2012, United Mid-Coast Charities handed out $331,000 in donations to about 50 organizations in Knox and Waldo counties. The largest was to Broadreach Area Child Care Services of Belfast, which received $40,000. Other beneficiaries included the Waldo County YMCA in Belfast, $25,000; New Hope for Women in Rockland, $15,000; Meals on Wheels in Rockland, $15,000; and Mid-Coast Hospitality House in Rockport, $15,000.
Brace is founder and president of Brace Management Group Inc. of Camden. He has served on local boards over the years and was named Townsperson of the Year in 2005 by the Camden-Rockport-Lincolnville Chamber of Commerce. He ran unsuccessfully in 1984 as a Republican candidate for the state Senate to represent Knox County.
Brace and his wife own a home in Rockport, a home in Rangeley, a cabin and property in Washington and a commercial building at 21 Elm St. in downtown Camden valued at $1.6 million where his offices are located.