U.S. Attorney's Office
District of Maine
(207) 780-3257
May 29, 2015

Camden Man Pleads Guilty to Mail and Tax Fraud Charges

PORTLAND, ME—United States Attorney Thomas E. Delahanty II announced that Russell W. Brace, a/k/a “Rusty,” 81, of Camden, Maine, pled guilty today in U.S. District Court to mail and tax fraud.

According to court records, between about July 1999 and September 25, 2014, the defendant, an officer and director of United Mid-Coast Charities, Inc. (“UMCC”), fraudulently obtained $4,646,636.45 by claiming that monies donated to UMCC, would be used for UMCC’s charitable purposes and not diverted for the defendant’s personal expenses or benefit. In fact, the defendant diverted the funds into his own accounts and used them for his benefit and to pay personal expenses. To execute the scheme, the defendant used the U.S. Postal Service to mail donation request letters, UMCC brochures, self-mailer remittance envelopes and thank-you letters. The investigation also revealed that the defendant failed to report the money he obtained as income on annual federal tax returns thus failing to pay almost $390,000 in taxes and filed false non-profit income tax returns for UMCC in which he failed to disclose the funds he illegally obtained from UMCC.

Brace faces up to 30 years in prison, five years of supervised release and a fine of twice the gain or loss on the fraud charge and up to three years in prison, one year of supervised release and a $100,000 fine on the tax charges. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.

The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division.

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