A federal judge in Philadelphia has agreed to put a civil case against Michael Liberty on hold while a criminal prosecution of the former Portland developer proceeds in Maine.

Michael Liberty, center, leaves the federal courthouse in Portland with his attorneys last March. A judge in Philadelphia has stayed a civil proceeding there until the developer’s criminal case in Maine is resolved.. Shawn Patrick Ouellette/Staff Photographer

The U.S. Securities and Exchange Commission has been trying to get Liberty, a Gray native who developed the Chandler’s Wharf condominiums and the office towers at 100 Middle St. in Portland, to pay an additional $5.4 million toward a fine to settle charges that a Liberty-led fund in Pennsylvania made improper investments. There was no finding of wrongdoing against Liberty in the 2010 settlement, but he agreed to a $6 million fine.

Liberty filed financial statements with the court that said he had a net worth of negative $29 million, and a judge reduced his fine to $600,000. However, the judge also said the SEC could seek to reinstate the full fine if regulators believed Liberty had lied about his finances.

Three years ago, the SEC went back to court and alleged that Liberty did just that while hiding assets and continuing to lead a high-roller lifestyle. The agency asked the judge to reinstate the full fine, but Liberty’s lawyers are fighting the effort.

A year ago, the SEC indicted Liberty in federal court in Maine on 10 counts including wire fraud and securities fraud in a case involving investments in Mozido, a financial technology company that Liberty helped found in Texas. The company is now called Fintiv.

Late last year, Liberty’s lawyers asked the federal judge in Philadelphia to put the Philadelphia case on hold while the criminal charges in Maine proceed. A civil case against him filed by the SEC in Maine, also dealing with issues related to Mozido investments, is also on hold.

The Philadelphia judge agreed, saying the situation met most of the criteria for a stay.

The Maine criminal case had been scheduled to go to trial in May, but on Monday, Liberty’s lawyers asked for a delay until October. They said they had received nearly 1.9 million pages of evidence from prosecutors and had dozens of witnesses to depose, arguing that there isn’t enough time to go through the documents and schedule depositions before a May trial date.

Weather also will play a role, they argued in their filing.

“Moreover, both parties’ interests in securing and accommodating witnesses to testify, as well as seating an attentive jury, will be compromised if this matter proceeds to trial in the middle of the short Maine summer,” the filing says, arguing that witnesses may be unavailable, accommodations for those coming from out of town will be difficult to find, and “potential jurors are likely to be impatient and distracted over the course of a lengthy trial, which the parties anticipate this will be.”

In addition, the filing said Liberty’s wife is due to give birth in mid-April, “making it difficult for him to participate in preparations in the weeks leading up to the trial.”

A judge in Maine will have to decide whether to agree to the delay.

Liberty was in Maine two years ago after he was charged with making illegal campaign donations by having family members and employees donate to a presidential campaign in 2011 and then reimbursing them to get around limits on individual donations. He was fined $100,000 and sentenced to four months in prison, which he served in late 2017 and early 2018.


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