Brings in FBI, hires a media spokesman, no charges filed

Tue, 09/30/2014 - 8:45am

Lynda Clancy

Rusty Brace, in December 2012, at his office in the Brace Building in downtown Camden. (Photo by Lynda Clancy)

CAMDEN — Revenue and expenses at United Mid-Coast Charities, the well-known charitable organization based in Camden, are being scrutinized by a legal entity, according to the president of the organization’s board of directors.

Steve Crane, UMCC board president, said Monday, Sept. 29, that there is an ongoing investigation by legal authorities of an alleged embezzlement by the organization’s former president, Rusty Brace.

“There is ongoing investigation by legal authorities of an alleged embezzlement by the past president of UMCC of UMCC money,” he said.

Attempts to reach Brace directly have been unsuccessful. Brace has yet to be charged with any crime.

No one has filed a complaint with Camden Police Department concerning UMCC, or Rusty Brace.

Camden’s United Mid-Coast Charities files suit against Rusty Brace, wants $3.8 million returned

“We have received nothing,” said Lt. Michael Geary, of the Camden PD. Nor has the the Maine Office of Attorney General. Nor has the District Attorney in Knox County.

“It is in the investigation stage,” said Dennis Bailey, who has been retained by UMCC as a spokesman. Based in Portland, Bailey is with Savvy, Inc.

But Bailey declined to say which agency or department has initiated the investigation.

Rumors about the investigation ripped through the local community beginning over the weekend, after an email was circulated to the 42 board members of UMCC by the organization’s executive committee. By Monday, queries and suppositions were filling conversations throughout the community. Crane said by Tuesday that UMCC needed to hire a spokesman because he was fielding constant phone calls.

The executive committee comprises Crane, Carol B. Robbins, John P. Williams, Carole L. Martin and Eric G. Belléy.

“The banks are obviously involved and going through records and financial accounts,” said Bailey. “We don’t have a full understanding. It involves a substantial amount of money over the years.”

There are couple of banks involved, but Bailey declined to identify them.

“This just happened within last week,” he said. “Folks are pretty devastated by it. We are not trying to withhold anything, but we don’t have all the facts. It is complicated with law enforcement and banks involved.”

The allegations also hits the family hard, many members of which live locally and are bearing the fallout of the circulation of UMCC’s weekend email.

UMMC has hired Jay McCloskey, of the Portland-based McCloskey, Mina and Cunniff, LLC.

Bailey said UMCC may release a statement on Facebook or its website to update the public.

On Tuesday, Sept. 30, UMCC posted the following at its website:

“Dear Friend of United Mid-Coast Charities,

We write to you today with deep sadness. We recently discovered that UMCC has been the victim of substantial embezzlement of donations by its former president, Russell (Rusty) Brace. We have engaged an attorney; and law enforcement authorities, including the FBI, have been notified. We are working with local banks to determine the full extent of the missing funds. We also have begun the legal process to recover the money that rightfully belongs to UMCC for its charitable giving.

“As you know, donations to UMCC are distributed to more than 50 local agencies to support children's services, medical care, community services and education programs for people in need throughout Knox and Waldo counties. We want to assure you that we are honoring our 2014 commitment to distribute $325,000 to those agencies in the coming weeks.

“We will provide more details as the investigation allows. If you have any questions or concerns, please send an email to UMCC@Midcoast.com and, if you wish us to call you, leave a phone number.

“We ask for your patience and support during these difficult times.

“Sincerely,

“Steve Crane, President, United Mid-Coast Charities”

UMCC, according to its mission statement: “Is dedicated to the support of charities which provide social services and care to the most deserving, including medical, physical, social, psychiatric or community educational services. UMCC strives to locate charities that offer the most possible benefit to residents in and around Mid-Coast Maine. We recognize our responsibility to provide the fairest possible distributions to the charities we support, and to distribute 100 percent of each donated dollar. Additionally, we will strive to expand UMCC’s fundraising capability to match the growing needs in and around the midcoast area.”

Crane assumed leadership of UMCC Aug. 20 after Rusty Brace retired from 17 years at the helm.

Brace has had a long presence in the community, with family and grandchildren who live close by. He owns the Brace Building in downtown Camden, a large historic brick building now filled with offices for small businesses.

He established Maine Coast Photo, stores in Belfast and Camden that catered to photographers prior to the arrival of digital cameras. He worked for Diversified Communications, was involved with running the Republican Journal, and National Fisherman in the 1970s. Brace also was involved with running Kodak’s Center for Creative Imaging in Camden in the early 1990s.

UMCC raises funds for 50 nonprofits in Knox and Waldo counties. The organization said that since its inception in 1942, it has donated every dollar it has collected, “thanks to an endowment that covers administrative expenses.”

According to the nonprofit’s 2012 tax statement, it received $307,814 in revenue. Of that, $226,255 derived from grants and contributions; $49,372 came from investment income; and $32,187 came from fundraising events.

Expenses that year were $437,149.

Assets that year were $1.6 million — $346,819 in cash and the rest in securities.

The endowment fund totaled $1.3 million that year, with $79,000 in expenses.

That year, UMCC distributed $330,787.

Of that, Broadreach Child Services received $40,000; Penobscot Bay YMCA, $32,000; Megunticook Rowing, $15,000; University of Maine Hutchinson Center, $10,000; Meals on Wheels, Camden District Nursing,New Hope for Women and Midcoast Hospitality House, $15,000; lesser amounts went to a variety of other area nonprofits.

In a December 2012 interview (Making music for charity), then president Rusty Brace told Penobscot Bay Pilot that the process of deciding which organizations can best use the money is a stringent process by which the 45-member UMCC Board of Directors takes seriously.

It begins with organizations submitting applications to UMCC, which are screened. Then, each of the 45 directors interviews the organization or agency, and analyzes financial statements.

Most of the time, the directors return to board meetings and approve the request for UMCC funding, “but in one or two cases, the director returns and says, 'not sure,'” he said.

After that, it is the UMCC Allocation Committee that decides how much money will get distributed to which organization. At the annual meeting in August, the entire Board of Directors votes on the final allocations, and checks are mailed to the agencies at the end of October.

Reach Editorial Director Lynda Clancy at lyndaclancy@penbaypilot.com; 207-706-6657