The former head of a Camden-based charity accused of embezzling millions reached a settlement Wednesday with United Mid-Coast Charities to pay them $4.6 million, but criminal charges are still expected, his attorney said Wednesday.
Officials at United Mid-Coast Charities said they discovered the alleged embezzlement after Russell Brace retired in August after 13 years as its president. Donors said they had given money that never reached the charity, officials said.
As part of the agreement, Brace admitted to “breach of duty, fraud and conversion of money belonging to United Mid-Coast Charities as a result of his theft of hundreds of donation checks that were made payable to UMCC,” charity President Stephen Crane said in a news release.
The charity sued Brace in Knox County Superior Court.
“In order to settle this case, the charity required Mr. Brace to agree to liquidate virtually all his assets and turn over the proceeds to UMCC. At the end of the day, I think the charity will recover a substantial portion of the money that was stolen from it,” said Jay McCloskey, the organization’s attorney, in the release.
United Mid-Coast Charities supports over 50 agencies in Knox and Waldo Counties.
Calls to Brace on Wednesday evening were not returned.
Brace’s attorney, Peter DeTroy said he did not want to discuss the settlement since it’s “quite likely” criminal charges will be brought.
“I anticipate there will be criminal charges,” DeTroy said. “While those are pending, I’m not comfortable saying anything (about the settlement).”
He added that Brace “has been cooperative” with both the civil and criminal investigations.
Crane has said he learned of the fraud when a donor showed him $75,000 worth of canceled checks that the charity never received. He saw Brace had initialed the checks and deposited them into a business account at The First, N.A., where the charity did not have its banking account. According to an affidavit, The First chief executive officer Daniel Daigneault produced a list of checks dating back to 2001, worth $3.8 million, that were made out to the charity but deposited into the account of Brace Management Group, owned and operated by Rusty Brace.
“Brace admitted that, without authorization or right, he stole donation checks made payable to UMCC,” Crane said in his affidavit. “(He) also admitted that he thereafter used those monies for his personal use and benefit.”
United Mid-Coast Charities was founded 72 years ago and provides funding for local community organizations in Knox and Waldo counties. Last October, the charity awarded more than $325,000 to 50 programs.
Staff Writer Noel K. Gallagher can be contacted at 791-6387 or at:
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