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IRS says Brace owes $396,000 in back federal taxes

By Stephen Betts | Oct 17, 2020
In this photo, Russell W. Brace, left, leaves the U.S. District Courthouse in Portland with his attorney, the late Peter DeTroy, following Brace's 2015 sentencing.

The Internal Revenue Service filed a lien of $396,000 against Russell "Rusty" Brace for unpaid federal income taxes.

The lien was filed Oct. 13 in the Knox County Registry of Deeds.

The lien is for unpaid taxes for each year from 2010 through 2014.

Brace, 87, served less than four years in federal prison after being sentenced in U.S. District Court in Portland in 2015 for stealing more than $4.6 million in donation checks from United Mid-Coast Charities between 1999 and 2014, and depositing them into his personal bank account.

The lien is to recoup taxes he did not pay on the money he stole. The amount listed as unpaid taxes each year vary over the five years with the most being more than $103,000 in 2011.

At his 2015 sentencing, Brace was also required to pay $3.6 million in restitution to both the charity and the insurance company for The First Bank. The charity recovered most of the money through the seizing of Brace’s bank accounts, the sale of his downtown Camden commercial building at 21 Elm St., other properties and the sale of personal property, including a boat and car.

The charity also received a settlement from the insurance company of the bank where Brace was depositing the stolen money.

He began serving the sentence in 2015 at the federal prison in Allenwood, Penn., and was then transferred to FMC Rochester, a secure medical facility operated by the U.S. Bureau of Prisons in Rochester, Minn. He was released in early 2019.

Brace is living back in Knox County. The IRS liens lists a mailing address as a post office box in Rockport.

Brace served as volunteer board president of the charity from 1997 until 2014, when he stepped down. The next board president discovered the embezzlement the following month after talking to a donor whose large contributions could not be found among the charity’s financial records.

U.S. District Judge George Singal said at Brace's sentencing hearing, Brace decided to steal from the charity rather than face the loss of prestige by going through bankruptcy because of his failing businesses.

“The victims were the poorest in the community,” Judge Singal said.

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Comments (3)
Posted by: ANANUR FORMA | Oct 20, 2020 14:34

maybe he got advice from Trump.

Posted by: Francis Mazzeo, Jr. | Oct 19, 2020 09:39

When you know what you are doing is illegal it is not a mistake.

Posted by: ANANUR FORMA | Oct 19, 2020 07:59

boy oh boy, did he make a big  mistake.............

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