CAMDEN, Maine — The president of a Camden-area charity said he is hopeful that the organization will recoup all $3.8 million allegedly stolen over the past 13 years by its former board leader.
But questions remain concerning how former board president Russell “Rusty” Brace was able to deposit checks made out to United Mid-Coast Charities into his own bank accounts at a bank where the charity did not have an account.
Paperwork filed in court on Friday in the charity’s civil lawsuit against Brace offered more details about his finances, including an account containing $700,000 that refers to “UCRC Char Fund.”
Stephen Crane, new board president, said United Mid-Coast Charities still has not received an answer to why The First, N.A. bank allowed Brace to deposit checks made out to the charity into the account of Brace’s Brace Management bank account at that bank.
United Mid-Coast Charities did not have an account at The First.
“I don’t know why,” Crane said. “They haven’t said anything about that.”
Crane said since the theft was discovered, however, the bank has been very cooperative and he expects that between the expected sale of Brace’s properties and the bank that the charity should get back all its money.
The charity board’s president said that clearly the bank should not have allowed Brace to make those deposits and that it was irregular.
The charity maintains that from 2001 until August 2014, Brace took checks from donors earmarked for the charity, deposited them into his account and then withdrew the money for his own use. Crane said last week that while Brace has admitted to the embezzlement, he has not apologized.
Several donation checks were for more than $100,000 with one being $200,000 for the charity that serves Knox and Waldo counties.
On Oct. 7, a judge approved liens being placed on Brace’s properties in Camden, Rockport, Washington and Rangely as well as freezing his bank accounts. Then on Oct. 15, Justice Daniel Billings approved a modification of this previous order to extend the liens to accounts under various Brace business names.
On Friday, paperwork was filed in Knox County Superior Court detailing how much money Brace has in his accounts at The First. The report from Susan Norton, bank executive vice president, reported that there was $694,731 in a checking account in the name of Brace Management Group Inc., doing business as UCRC Char Fund.
Brace also has a personal checking account with $15,345 in it, Brace Management had another checking account with $8,051, and he and his wife, Rebecca, have a joint personal checking account of $30.
All of those funds, however, are security for a business loan with The First that Brace and Brace Management took out in December 2004, according to the court filing. The amount of the loan was not listed.
Brace has not been charged with any crime. The charity said it referred the case to the FBI, but federal prosecutions of financial cases can take a year or more to result in the filing of charges.
Attorney Jay McCloskey, a former U.S. Attorney who is representing the charity in its civil suit, said there is no allegation of criminal conduct by the bank.
“Not whatsoever. There was no collusion” between anyone with the bank and Brace, McCloskey said.
He said, however, common sense would dictate that Brace should not have been allowed to deposit the charity’s checks into his account.
Tony McKim, The First’s president, said Thursday that the bank would have no further comment on the case. Last week, he said the bank took the theft allegation seriously but would not comment on the bank’s role in Brace’s alleged embezzlement scheme.
Lloyd LaFountain, the superintendent of the Maine Bureau of Financial Institutions, said that the state agency does not regulate federally-chartered banks such as The First.
Federally-chartered banks are regulated by the Comptroller of the Currency. A spokeswoman for that agency said this week that the federal agency does not comment on allegations against specific banks. She said she could not immediately answer general questions about federal regulations concerning charitable accounts but did not return calls by the end of the week.