ROCKLAND — The suit filed Friday afternoon, Oct. 3, in Knox County District Court, in Rockland, against former United Mid-Coast Charities president Russell Brace asks that he return $3.8 million to the organization, plus any other costs associated with complaint itself.
The suit is attached to the right in entirety as a PDF.
Attempts to reach Brace at his Washington and Rockport homes have been unsuccessful.
The FBI has been investigating this case of fraud.
There are no criminal charges against Brace at this point.
According to UMCC spokesman Dennis Bailey, current UMCC president Stephen Crane, in making the rounds for the nonprofit’s annual appeal, met with a donor Sept. 20, and at that point the donor said he had previously given $75,000; but, UMCC had no record of that. That’s when the nonprofit got suspicious.
The donor had copies of the cancelled checks that had Brace’s stamps on them. Then members of UMCC’s executive committee went to the First and the bank called up all the deposits going back to 2001.
“This is why audits and records don’t reveal any diversion of money, because it was it a separate account managed by Rusty Brace and of which the charity had no knowledge,” said UMCC spokesman Dennis Bailey.
In the affidavit of Crane, he said he spoke with one of the large donors of UMCC.
“The donor told me that recently he had made three large donations to UMCC,” Crane said, in the affidavit. “I told this donor that UMCC had no record of those donations in the UMCC donor base. He expressed surprise and showed me three cancelled checks made out to UMCC totaling $75,000. Upon review of the endorsements on those three checks, I noticed that the checks were deposited into an account at the financial institution First, N.A. I also saw that Russell Brace initialed the endorsement on these checks.”
Crane and UMCC Treasurer Eric Belley met with Daniel Daigneault, president of First, N.A.
“He showed us a list of checks which were all payable to UMCC which had been initialed by Russell Brace and deposited in the Brace Management account at First, N.A.,” said Crane, in the affidavit.
Filed by Attorney Jay McCloskey, of the Portland-based McCloskey, Mina & Cunniff, LLC, the suit says Brace, who served as volunteer president from 1997 to August 20, 2014, and received in that capacity donation checks made payable to UMCC and intended for distribution to agencies in Knox and Waldo counties for children’s services, medical care and education programs.
The suit alleges that beginning in Dec. 2001, and continuing through 2014, Brace “stole and converted money belong to UMCC by wrongfully taking donation checks made payable to UMCC and then using deposit stamps bearing the names of multiple depositors, including the Brace Management Group – to ‘endorse’ and deposit these donation checks into his Brace Management Group account at The First.”
The First, a Midcoast bank, is headquartered in Damariscotta with offices in Camden and Rockport.
The amount of the donation checks allegedly stolen by Brace were in amounts of thousands of dollars, the suit said; “but on multiple occasions were in amounts of $100,000 or more, including on at least one occasion more than $200,000.”
On Sept. 25, Stephen Crane, current president of UMCC, met with Brace and said in the suit that Brace admitted that he took donation checks made payable to UMCC and deposited them into the Brace Management Group account at The First.
The suit also said the Brace told Crane that he admitted to using the money for personal use and benefit.
UMCC did not have bank accounts at The First during this time period, the suit said.
“Upon information and belief,” from December 2001 to August 2014, Defendant Brace stole not less than $3.803,000...,” the suit said.
UMCC is demanding the money be returned.
According to Bailey, UMCC will continue to distribute money as usual, $300,000 this month. The annual Holiday Pops concert has been cancelled.
Editorial Director Lynda Clancy can be reached at email@example.com; 207-706-6657.