United Mid-Coast Charities has been the victim of alleged embezzlement of donations by its former president Russell "Rusty" Brace of Rockport, according to current UMCC president Steve Crane.

A substantial amount of money was taken over the course of many years, according to Dennis Bailey, of Savvy Incorporated, a crisis management firm in Portland, who has been hired by the charity as a media spokesman.

In a letter posted on the UMCC website Tuesday morning, Crane says, "We recently discovered that UMCC has been the victim of substantial embezzlement of donations by its former president, Russell (Rusty) Brace. We have engaged an attorney; and law enforcement authorities, including the FBI, have been notified. We are working with local banks to determine the full extent of the missing funds. We also have begun the legal process to recover the money that rightfully belongs to UMCC for its charitable giving."

The investigation is likely to take several weeks before charges are brought, but liens against Brace's property will be in place before the end of the week, according to Bailey.

UMCC is being represented by attorney Jay McCloskey, of McCloskey, Mina & Cunniff in Portland. McCloskey is a former federal district attorney who specializes in prosecuting white-collar criminals. McCloskey is preparing the lien filings, said Bailey.

Brace served as president of UMCC for 17 years, until this August, when Steve Crane, former president of Allen Insurance and Financial, was named president of the charitable organization, which was founded in 1942.

At that recent annual meeting, on August 20, when Crane was elected president, he said, "I am eager to continue Rusty Brace's wonderful and dedicated work, and to work with UMCC's board of directors to strengthen the organization for the future."

The discovery of the missing funds occurred after that transition in leadership, according to Crane.

"I discovered this about a week and a half ago," said Crane, when reached by telephone on Tuesday morning.

"No suspicions had been raised," said Bailey. "There were no red flags. There was an irregularity and someone saw something. It was happenstance that it was uncovered."

Crane said the federal investigation prevents him from revealing any details. He was unsure how long the federal investigation would take.

"As soon as we are able, I will give more information to the public," he said.

Bailey said that the charity had a good reputation, an all-volunteer staff, and all administrative costs were covered by an endowment. Like many organizations, UMCC put its trust in its volunteers, like Brace, who have deep roots in the local community, he said.

"There is no perfect system. It all depends on trust. I can tell you, it is always possible to get around the rules, if you are determined," said Bailey, referring to a case he worked on that involved a law firm that had all the checks and balances in place and was still a victim of embezzlement.

"This is an incredible breach of trust in someone the organization had full faith in," said Bailey.

"A complete review of the procedures and processes, oversight, and checks and balances is currently under way at the organization," said Bailey. He said the organization has written to all donors and will keep them informed of the process as it unfolds.

According to its recent tax filings, UMCC paid KAX Office Center in Camden to provide bookkeeping and clerical services to the organization. The tax filings disclosed, under "business transactions involving interested persons," that Brace owned KAX Office Center.

Brace sold KAX Office Center this summer. Tammy Swasey-Ballou bought the business on July 1, 2014, and took over the existing accounts. Swasey-Ballou said she has 50 clients and is planning to update services and software after the first of the year. Swasey-Ballou said KAX no longer provides entire office administration for UMCC, as they did under Brace's ownership.

"It's not the way it was, prior to me purchasing the company," she said. "Before, KAX did the whole administrative piece. We only do bookkeeping (for UMCC) now, and starting with the new fiscal year - which starts today - I will be doing it personally."

A review of UMCC tax filings indicated that under Brace's ownership, KAX received $53,256 in 2010 for "bookkeeping and clerical services to United Mid-Coast Charities." At their publicized top rate for bookkeeping ($44 an hour), the company would have billed for 1,210 hours of work - just shy of 7 months of full-time work - for the charity.

In 2011, KAX was paid $47,871 for bookkeeping and clerical work for UMCC.

2012 tax filings were not available.

According to UMCC's website, it distributes donations to over 50 local charities to support children's services, medical care, community services and education programs in Knox and Waldo counties. Crane wrote that the organization will still honor its commitment to distribute $325,000 in the coming weeks.

Local charities that received the most funds from UMCC, as indicated in the latest available tax forms (2011), include Broadreach Childcare Services ($40,000), Penobscot Bay YMCA ($32,000), and Waldo County YMCA ($25,000).

Camden District Nursing, Meals on Wheels, Mid-Coast Hospitality House, New Hope for Women, and Megunticook Rowing each received $15,000.

Knox County Clinic, LifeFlight Foundation of Maine, Tanglewood 4-H camp, and many other local organizations received $10,000, or less.

At least eight local organizations and businesses participate in UMCC's voluntary employee payroll deduction program that redirects a portion of monthly wages to the charity. Participants include Down East Enterprises, Broadreach Family and Community Services, Waldo County YMCA, Pen Bay Healthcare, Bank of America, the University of Maine, Fisher Engineering and the Maine State Employees Combined Charitable Appeal. According to an April 2012 press release from UMCC, Fisher Engineering employees contributed the most of any workplace participating in UMCC's payroll deduction program. Many, many area organizations have hosted events over the years to benefit United Mid-Coast Charities; this summer's Pop for Change, for example, raised $20,000 for UMCC.

Calls to Brace for comment have not been returned.