CAMDEN, Maine — The attorney representing Russell “Rusty” Brace said he does not expect to file any additional requests to delay a lawsuit filed by the charity that claims its former board president embezzled $3.8 million.
It has been nearly six months since Brace was accused of stealing $3.8 million from the United Mid-Coast Charities, but criminal charges have yet to be filed against the elderly businessman.
The organization filed a civil lawsuit against Brace in October to recover the funds it alleges were stolen.
Brace’s attorney, Peter DeTroy of Portland, has confirmed that his client also is the target of a federal investigation by the U.S. attorney’s office, and he has succeeded in getting two extensions in the civil case for fear Brace might risk implicating himself in a parallel criminal case.
The last extension approved by the state court to put the civil case on hold expired March 6. DeTroy would not elaborate on why he does not expect to seek another delay, saying only that he anticipated learning more about the criminal matter this week.
Brace has until March 26 to file a response to the civil lawsuit or risk defaulting on it.
State Superior Court Justice Daniel Billings ruled in October that it was more likely than not that the charity could prove that Brace had committed the theft and thus approved liens being placed on Brace’s properties across the state. The assessed values of those properties total $3 million.
While not commenting on the specific case, U.S. Attorney Thomas Delahanty II said last week that investigations into financial crimes can take a long time, particularly if the misconduct has gone on for a lengthy period.
In addition, the state’s top federal prosecutor said federal court rules are different from Maine’s court rules, in that a defendant in a federal case must go to trial within 70 days of being charged. This means the prosecution must have its investigation complete before filing charges.
There is no such time frame in the state’s court, Delahanty pointed out.
“On the federal level, all criminal cases are subject to the Speedy Trial Act without regard to whether the defendant is held in jail or on bail. Criminal cases are subject to a short time clock. It is, therefore, necessary for federal prosecutors be ready to go to trial within that time,” he said.
Extensions are allowed, but only at the request of the defendant.
At the state level, a defendant often is charged when there is probable cause the suspect committed a theft. The state then puts together its case before going to trial, which could be a year or more.
The Brace case was referred to federal authorities by United Mid-Coast Charities Inc. of Camden after its officials said Brace admitted on Sept. 25 that he deposited numerous checks earmarked for the charity into his own bank account for the past 14 years. The charity and DeTroy have said the FBI and U.S. attorney’s office are investigating the case; criminal charges are expected.
The U.S. attorney’s office’s policy is not to comment on whether there is an investigation on any case until someone is charged.
The revelation that Brace had stolen the money from United Mid-Coast Charities became public Sept. 29, four days after charity leaders said he admitted to taking numerous, sometimes large, checks earmarked for the charity and depositing them in his Brace Management Account at The First, N.A. The thefts began in 2001 and continued until August 2014, when he stepped down Aug. 20 as the volunteer board president post. He had been the board president for 17 years.
The alleged thefts were uncovered after newly elected Board Chairman Stephen Crane attempted to solicit a donation from a local resident on Sept. 20, but that donor indicated he already made three donations through Brace totaling $75,000, according to an affidavit filed with the lawsuit. The charity’s financial records did not show those donations.
The canceled checks were traced back to an account Brace had at The First, N.A. bank, according to court documents. Crane stated in the affidavit that the charity did not have an account at that bank.
The lawsuit further alleges that Brace illegally converted for his own use donation checks dating back to December 2001 and totaling $3,803,000.
Brace has properties that have been put up for sale in an effort to repay the charity, according to DeTroy. None of the properties have sold. The properties that have gone up for sale include his Rockport home, a lakefront cottage in Washington, a home and undeveloped land in Rangeley and his downtown Camden commercial/office building.
Brace is founder and president of Brace Management Group Inc. of Camden. He has served on local boards over the years and was named Townsperson of the Year in 2005 by the Camden-Rockport-Lincolnville Chamber of Commerce. He ran unsuccessfully in 1984 as a Republican candidate for the state Senate to represent Knox County.