The former head of a Camden-based charity who embezzled more than $4.6 million from the nonprofit before his retirement last year pleaded guilty Friday to related federal mail and tax fraud charges.

Russell “Rusty” Brace, 81, of Camden reached a civil court settlement with United Mid-Coast Charities last month to repay the $4.6 million, but criminal charges had not been announced until Friday.

Brace remained free on his own recognizance after appearing in U.S. District Court in Portland before Judge George Singal after waiving his right to have the case against him presented to a federal grand jury.

During Brace’s time as president and director of United Mid-Coast Charities from 1999 to 2014, he solicited donations by mail that were intended for social service agencies and charities in Knox and Waldo counties. But once the checks came in, he deposited them in a bank account unassociated with the nonprofit, according to prosecution documents filed with the court.

“Between July 1999 and Sept. 25, 2014, the defendant improperly obtained by fraud … and deposited 377 checks payable to UMCC totaling $4,646,636.45 into The First Bank account and thereafter used the funds to pay personal expenses and for his benefit,” Assistant U.S. Attorney Donald Clark said in the documents.

Brace also failed to report – as income on federal tax returns – the money he deposited and spent, and also avoided paying nearly $390,000 in taxes on it. He filed false tax returns for the nonprofit in which he failed to disclose the money he obtained illegally from United Mid-Coast Charities, Clark wrote.


Members of the nonprofit began looking into financial records after Brace’s retirement last August and initially discovered that three checks totaling $75,000 in donations had not been deposited in United Mid-Coast Charities’ bank account but had instead been deposited into The First Bank account. A following banking investigation revealed a much larger scheme, at first thought to be at least $3.8 million, according to court records.

“On Sept. 25, 2014, UMCC confronted the defendant with improperly taking $3.8 million in donations made to UMCC and he admitted taking the funds and apologized,” Clark wrote.

The nonprofit subsequently sued Brace in Knox County Superior Court. They reached a settlement in April in which Brace agreed to repay the money by liquidating nearly all of his assets, the charity said last month in a press release announcing the settlement.

In the criminal case, Brace is scheduled to be sentenced on Sept. 18. He faces up to 30 years in prison, five years of supervised release and a fine of up to twice what he is accused of stealing.

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.

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