FARMINGTON — A Jay man is accused of embezzling nearly $80,000 from a federally funded program between about May 2014 and Jan. 5, according to a complaint filed in U.S. District Court in Portland.
Timothy P. Gallagher, 46, was arrested on a federal warrant on Aug. 19. He made an initial appearance in U.S. District Court the same day and was released on a $10,000 unsecured bond, according to court documents. Among his release conditions are that he submit to supervision by and report for supervision to the U.S. Probation and Pretrial Services Office.
Portland attorney Sarah A. Churchill said Wednesday that she and Gallagher declined comment at this time.
Gallagher is an ex-construction project manager for Stanford Management LLC. The company is a full-service property management firm specializing in affordable housing, and providing diverse housing opportunities to families, seniors and people with disabilities in Maine and Pennsylvania, according to Stanford’s website.
According to a criminal complaint filed by Stephen P. Tufts, a special agent of the U.S. Department of Housing and Urban Development, Office of the Inspector General, the agency has been investigating Gallagher since April for federal program fraud.
The investigation revealed that Stanford Management manages several properties that are federally funded. Stanford received and held in its care, custody and control of more than $180,000 in 2013 and more than $192,000 in 2014 from HUD. It also received and held in its care, custody and control of about $2 million in 2014 from the U.S. Department of Agriculture, according to the complaint.
According to Stanford’s records, from at least Dec. 2, 2013, to Jan. 5, Gallagher was employed as a full-time construction project manager at Stanford and was responsible for the oversight of scope, direction, monitoring and completion of at least nine Stanford construction projects. Between May 2014 and Jan. 5, Gallagher claimed to have retained a construction company, Harley Construction, to perform work through subcontractors at Stanford properties in Maine, the complaint states.
“In fact, over that period of time, Gallagher owned Harley, a fact he concealed from Stanford by claiming that Harley was owned by Jon Branmeir. On Jan. 5, 2015, Stanford fired the defendant (Gallagher),” the complaint states.
Gallagher told a Stanford representative on Feb. 17 during an interview, that he and Branmeir started Harley six months prior to being hired by Stanford. He also told the representative that Branmeir was a silent partner who does nothing for Harley and does not go to construction sites.
Gallagher was the estimator and primary partner. Harley had an account at Androscoggin Savings Bank into which Stanford checks were deposited and from which Harley paid subcontractors. He knew that he had to disclose his interest in Harley, but did not because he saw it as a way to make money by acting as the general contractor on these projects. He admitted that he was paid a salary to perform work, according to the complaint.
“According to Stanford project business and financial records, between May 14 and Nov. 25, 2014, Harley was paid $251,072 for work performed at nine Stanford properties. According to bank account records for Harley at Androscoggin Savings, Harley paid $171,434 to subcontractors on those jobs. Consequently, the defendant obtained by fraud, the $79,639 difference,” the document states.
According to a subcontractor who was paid about $108,000 by Harley on those nine projects, Gallagher told him that Harley was owned by Stanford. The contractor first knew that something was wrong when he saw the defendant on Dec. 31, 2014. Gallagher told him that he had been called into a meeting at the Stanford office on Jan. 5. The defendant thought he would be fired because Stanford had learned that Gallagher owned Harley. He was also worried that he would be arrested, the complaint states.
About two weeks after Gallagher had been fired, the subcontractor contacted Gallagher because he had not been paid for a project. The defendant told him that Stanford wanted to talk to Branmeir prior to releasing any funds on the project. Gallagher asked the subcontractor to pose as Branmeir so that the funds would be released but the contractor refused, the document states.
The complaint also states that according to a Stanford employee, on Feb. 4, she met with an individual claiming to be Jon Branmeir who claimed to be from Harley, but who refused to provide her with any identification.
“According to account records for Harley at Androscoggin Savings Bank, the defendant opened the account on May 23, 2014, and was an authorized signator. Jon Branmeir was not an authorized signator,” the court document states.
According to the Sun Journal court records, Gallagher was found guilty by a Farmington court of a 2012 charge of disorderly conduct — offensive words/gestures and fined $300. Charges of domestic violence assault and criminal mischief were dismissed.
He was also found guilty by a Lewiston court of a 2008 charge of operating after registration was suspended and fined $100.