ROCKLAND — Portland attorney Peter DeTroy has asked a Knox County District Court judge to extend the time required to respond to allegations made in lawsuit against his client Rusty Brace, of Rockport. The suit had been filed Oct. 3 by United Mid-Ccoast Charities, the very nonprofit that Brace had formerly presided over as president.

“The U.S. Attorney is still in the process of an investigation into potential criminal charges and discussions are currently underway between the parties and plaintiff’s counsel, which may resolve the present matter,” wrote DeTroy, in his Feb. 5 motion to extend the stay.

On Oct. 15, Detroy asked to stay the civil action because Brace was the target of a criminal investigation by the U.S. Attorney’s Office for the District of Maine. That stay was granted Oct. 20, until Dec. 19. 

Another such request was made in December, which the judge granted for another 30 days, to Feb. 7.

The third request for a stay, dated Feb. 5, arrived at Knox County District Court Feb. 9.

“Additionally, while Mr. Brace has not formally been charged criminally, an investigation by the U.S. Attorney’s Office is progressing and charges are anticipated,” DeTroy wrote, in the Feb. 5 request. “Counsel for Mr. Brace has conferred with Attorney McCloskey, who does not oppose this request for an extension until March 6.”

DeTroy asks the judge to extend the stay until March 6, and then another 20 days after the stay expires.

On Oct. 13, DeTroy, of the Portland-based Norman, Hanson and DeTroy, said the investigation into the allegation that Rockport resident Rusty Brace diverted $3.8 million over a span of 13 years from the charity nonprofit he once presided had started.

The U.S. Attorney’s Office in Portland declined to comment on whether a criminal investigation is under way or not, per its standard practice of not talking about cases until a complaint or indictment is filed.

In court documents, current UMCC President Stephen Crane is cited as stating that he met with Brace on or about Sept. 25 and that’s when Brace admitted to the diversion of the checks, some in the amount of $100,000 to $200,000, into his personal account.

On Oct. 3, Attorney Jay McCloskey, of the Portland-based McCloskey, Mina & Cunniff LLC, had filed a civil suit against Brace in Knox County Superior Court on behalf of his client, United Mid-Coast Charities. The nonprofit said in its suit that it had determined that its former president had diverted checks intended for the charity into his own Brace Management Group checking account held at the First N.A., a bank with branches in Rockport and downtown Camden. The First rents ground floor space in the downtown Brace Building, which is owned by Brace Management Group. The Brace Building sits at the corner of Elm and Washington streets.

On Oct. 17, The First N.A., a Damariscotta-based bank with branches in Camden and Rockport, submitted its court disclosure of “goods, effects or credits” of Brace.

While the federal investigation continues into allegations that Brace diverted $3.8 million over a span of 13 years continues, the bank that he did business with has declared how much those accounts are worth.

1) Personal checking account in the name of Russell Brace, $15,346.86

2) Personal checking account in the name of Rebecca W. Brace/Russell W. Brace, $30.23.

3) Business checking account in the name of Brace Management Group, Inc.: $8,051.60

4) Business checking account in the name of Brace Management Group, Inc., DBA UCRC Char Fund: $694,731.30

“All of the funds in said accounts are subject to the bank’s first priority security interests and rights of offset under a certain Business Loan Agreement by and between the bank and Russell W. Brace and Brace Management Group, Inc., dated Dec. 8, 2004, and applicable law,” the First said in its document filed Oct. 17 at Knox County Superior Court in Rockland.

The document did not specify anything more about that agreement.

By Oct. 9, McCloskey obtained a judge’s approval to place liens on assets owned by Brace, as well as the Brace Management business accounts at the First.

The First N.A. voluntarily froze Brace’s accounts as soon as the allegations surfaced, said UMCC spokesman Dennis Bailey, on Oct. 14.

Real estate property owned by Brace, and which are now attached, include:

• The Brace Building, 21 Elm St., Camden, assessed by the town at $1.7 million;

• House and land, 39 Spruce St., Rockport, assessed at $774,800;

• House and land in Washington, 69 Steele Lane, assessed at $314,954; and

• House and land in Rangeley, assessed value approximately $256,000.

The properties remain under the ownership of Brace, but the judge agreed to attaching the assets, after McCloskey’s argued that: “In the present case, the affidavit of Stephen [Crane, current UMCC president] demonstrates that the plaintiff is more likely than not to obtain judgment of not less that $3,803,000. In order to protect Plaintiff’s likely recovery, it is necessary to obtain an attachment against Brace’s property, goods and chattels, as well as trustee process against Defendant’s goods, effects, accounts and credits held by others.” 

Related stories

The First discloses amounts in Brace accounts

Legal, investigative wheels turn on Camden charity theft case

Camden business files suit against Rusty Brace; UMCC will be stronger, more transparent, board president says

Camden’s UMCC files suit against Rusty Brace, wants $3.8 million returned

Camden’s United Mid-Coast Charities embezzlement investigation underway, says president 

Editorial Director Lynda Clancy can be reached at lyndaclancy@penbaypilot.com; 207-706-6657.