Ex-Charity Head Faces Allegations of $3.8M Embezzlement

October 24, 2014 Posted by Jessica Shofler in Director Duties, News, Nonprofits

Embezzlement AllegationsRussell Brace, the former head of United Mid-Coast Charities Inc, a social services organization located in Maine, is facing allegations in a civil lawsuit of embezzling $3.8 million from the organization. The organization alleges that over 13 years Brace deposited millions of dollars in donations intended for the charity into bank accounts he controlled.

The allegations claim that Brace acknowledged the long-term embezzlement after being confronted by officials from the organization, who became suspicious after being unable to find records in the charity’s financial files of $75,000 in donations from a major donor.

Brace has now also become the target of a federal criminal investigation, which can take a year or more to complete. In the meantime, the civil suit will have to what as the judge agreed with Brace’s attorney that moving forward could put Brace at a disadvantage in the criminal case.

These allegations of embezzlement are unusual only in that they made the news. Embezzlement is, in fact, a huge problem in the nonprofit sector.

How many incidents of embezzlement will you have to read about before reviewing your organization’s checks and balances to ensure it doesn’t happen to your organization?

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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