PORTLAND, Maine — The former head of a midcoast area charity accused of stealing more than $4.6 million earmarked for the organization is scheduled to plead guilty to federal charges on May 29.
Russell “Rusty” Brace is expected to appear in U.S. District Court and enter guilty pleas to one count of bank fraud and two counts of tax fraud, according to Brace’s attorney Peter DeTroy.
Once the pleas are entered, the U.S. Probation Office will compile a pre-sentencing report and then both the defense and prosecution will make their recommendations concerning what sentence Brace should receive. Sentencing likely would not occur for several months.
DeTroy said Thursday that he could not speculate on a possible sentence for Brace, indicating that the amount of money involved would be a factor.
In 2013, a bank employee convicted of bank fraud for embezzling $900,000 from a Rockland bank was sentenced to 33 months in prison. In 2011, another bank employee who was convicted of bank fraud at a Waldoboro bank also was sentenced to 33 months in prison.
Stephen Crane, who succeeded Brace as president of the charity last August and who uncovered the longtime embezzlement a few weeks later, said he is very pleased that this matter is coming to an end. He said the pleas and eventual sentencing would provide closure.
Crane said he had no recommendation on what sentence Brace should receive but was confident that the federal government would see that justice prevails.
The charity settled a civil lawsuit last month with Brace in which he admitted to breach of duty, fraud and conversion of money belonging to the charity after his theft of hundreds of donation checks made payable to the charity. He also agreed as part of the civil lawsuit settlement to pay back $4,646,636.
Brace had served as the volunteer president of the organization since 1997. The organization makes donations to other nonprofit groups.
The charity’s attorney Jay McCloskey said last month that Brace agreed to sell off virtually all his assets in order to repay the charity. McCloskey said the charity will recover a substantial portion of the money stolen from this settlement, which is unusual in embezzlement cases.
Brace was taking checks donated to United Mid-Coast Charities and depositing them in his own account at The First. The charity did not have an account at that bank. The organization has since settled its claims against the bank but details of that settlement are not being released by either side.
McCloskey said last week that Brace spent a lot of the money on businesses that he operated that did not do well financially. Brace owned Brace Management, which managed properties in New Hampshire and Maine. That company has been based out of his 21 Elm St. office building in downtown Camden for more than 40 years.
McCloskey said that Brace also was living well off the stolen money.