A Jay man is expected to plead guilty this month in federal court to embezzling nearly $80,000 from a federally funded program.

Timothy Gallagher, 46, faces up to 10 years in prison and a fine of up to $250,000 on the felony charge of federal program fraud.

Gallagher, an ex-construction project manager for Stanford Management, pleaded not guilty in November to the charge. Authorities say the embezzlement occurred from around May 2014 to Jan. 5, 2015.

The company received more than $2 million in federal funds in 2014.

Gallagher, who was an employee of Stanford, is accused of violating rules and regulations when he failed to disclose to Stanford Management that he owned Harley Construction in Jay, which bid on and received contracts from Stanford to do maintenance and repairs on low-income housing projects managed by Stanford.

Gallagher had been scheduled to change his plea to guilty last month but missed his March 28 court date because his attorney, Sarah Churchill, failed to give him notice, according to court papers. That hearing was rescheduled for Thursday.


But Gallagher was upset by the failure and asked Churchill to withdraw as his legal counsel. She filed a motion that was heard in U.S. District Court in Portland on Thursday. Judge Nancy Torresen denied that motion Thursday.

Because Gallagher’s trial had been set for jury selection on Monday, the judge moved his case to the May trial list and scheduled a plea hearing for April 14.

In court papers, Churchill wrote that Gallagher was tasked with awarding contracts to various bidders.

“There are no allegations that the bids received by Harley Construction were improperly inflated or that the quality of the work done was sub par,” Churchill wrote. “Additionally, there were times where Harley Construction was not awarded the contract that was bid on because they were not the lowest or best bid.”


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