Former Portland developer and entrepreneur Michael A. Liberty is facing potential prison time after pleading guilty to making fraudulent donations during the 2012 presidential campaign.

According to federal prosecutors, Liberty orchestrated a “conduit contribution scheme” in which he convinced employees, associates and family members to each contribute $2,500 to a presidential primary campaign. Liberty then reimbursed those nine individuals a total of $22,500, violating federal laws against such pass-through donations.

A major player and controversial figure in Portland’s development scene, Liberty, 56, pleaded guilty to the charges Monday in U.S. District Court in Portland and could face up to two years in prison and a $250,000 fine. However, federal prosecutors are recommending a fine of between $15,000 and $40,000 and a sentence of six months as part of a plea agreement.

“Michael Liberty has cooperated with the government in this matter, which involved incidents that occurred six years ago,” said Liberty’s attorney, Richard Zack of the Philadelphia law firm Pepper Hamilton. “He has accepted responsibility for his conduct and wishes to move on with his life.”

Court documents do not specify which presidential campaign received the donations, and Assistant U.S. Attorney Donald Clark declined to comment. However, campaign finance disclosure reports show that Liberty himself contributed $2,500 in both 2011 and 2012 to Republican presidential candidate Mitt Romney, both times listing Portland-based Katahdin Corp. as his employer.

Liberty has a history of donating to political campaigns in Maine. In 2012, he also contributed $10,000 to the Maine Republican Party and $2,500 to U.S. Sen. Angus King, an independent.

The scheme began in May 2011 when an unnamed fundraiser for the presidential campaign committee contacted Liberty seeking help rounding up the maximum allowed donation of $2,500 from individuals. According to federal prosecutors, Liberty knew the conduit contribution scheme was illegal and the donors-in-name-only wrote checks knowing they’d be reimbursed.

Court documents do not name the would-be donors or which of Liberty’s various companies they worked for, identifying them only as Company 1 and Company 2. Clark declined to provide additional information, and it was unclear Monday whether the donors had been charged with wrongdoing.

“On May 13, 2011, (Liberty) directly and indirectly solicited his employees, family members and associates for $2,500 contributions to the committee with the understanding that the defendant would provide the funds for the contributions and that the employees, family members and associates would serve as conduits,” reads the version of events filed with the court by the U.S. Attorney’s Office. “That same day, the defendant caused funds to be dispersed from Company 1’s bank account as an advance or reimbursement for the conduit’s contributions.”

Neither the presidential campaign nor the fundraising committee were apparently aware of the illegal contributions. It was unclear Monday how the federal government learned about the scheme, which was investigated by the FBI.

The federal case against Liberty is a dramatic turn for a self-made man who founded numerous companies and charitable organizations, including one technology firm valued at more than $5 billion last year.

Now a resident of Windermere, Florida, Liberty grew up in Gray, and began dabbling in real estate in his late teens. By the 1980s he was a major developer in Maine – particularly in Portland – and is now the head of a suite of technology, health care and real estate companies.

A wealthy man by age 30, he played a part in multiple real estate deals and economic development projects in Maine. He is a former owner of Oxford Plains Speedway, and in 1996 he worked with former Gov. John McKernan to take over the former C.F. Hathaway shirt factory in Waterville, saving hundreds of jobs at the time.

Known as one of the state’s major deal-makers in the 1980s and into the 1990s, he was sued on several occasions by people alleging he owed them money. Although Liberty’s name appears less in Maine development news today, several of his companies are still based in or have offices in Maine. And his nonprofit, the Liberty Family Foundation, remains active in Maine.

His developments in Maine include two office towers at 100 Middle St., and the Chandler’s Wharf waterfront condominiums in Portland. His Liberty Group and the subsidiary American Housing Preservation Corp. also built numerous affordable-housing developments for elderly and low-income residents across the country.

But a large project he proposed for the Portland waterfront prompted a referendum that led to a ban on non-marine uses there. The city relaxed that rule only recently.

In 2006, the federal Securities and Exchange Commission filed a civil action against Liberty, accusing him of misappropriating $9 million from a private venture-capital fund that had public pension funds among its largest investors. Liberty strongly denied the allegations, but reached a confidential agreement with the SEC several years later.

Today, Liberty is the head of several companies that include Mozido, an Austin, Texas-based technology firm that aims to be the next “mobile wallet” for up to 2 billion people around the world.

Mozido has received hundreds of millions of dollars in investments and, after some high-profile acquisitions, was valued last year at more than $5 billion, according to a July 2016 article in Forbes. But the highly critical article also raises questions about Liberty and Mozido, pointing to delayed payrolls and questioning what results the hefty investments have yielded to date.

Liberty is also the founder and primary donor to the Liberty Family Foundation, a Gray-based charitable organization that distributed more than $238,000 in 2013, according to federal filings. Among the recipients of donations that year were Gray-area youth sports programs (nearly $20,000) the town of Gray ($40,900) for “community planning and enrichment” and the Crystal Lake Ice Fishing Derby ($18,753), which raises money for Maine military families, local schools and Maine Department of Inland Fisheries & Wildlife programs.

Liberty also has been a significant political donor over the years, giving hundreds of thousands of dollars to candidates and committees. Although most of his recent donations have gone to Republicans, Liberty has financially supported candidates from both major parties in the past.

During the 2016 election cycle, Liberty donated $5,400 – $2,700 for both the primary and general elections – to Republican U.S. Rep. Bruce Poliquin’s successful bid for a second term in Congress. In 2014, he donated nearly $100,000 to a political action committee working to elect Michael Edes as Cumberland County sheriff during Edes’ unsuccessful Democratic primary run against Sheriff Kevin Joyce.

This story was updated to remove a reference characterizing Liberty’s family as low-income.

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