PORTLAND — A Jay man pleaded guilty Thursday to embezzling nearly $80,000 between May 2014 and Jan. 5, 2015, from a management agency that receives federal funds.

Timothy Gallagher, 47, entered the plea in U.S. District Court, according to court documents.

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

Gallagher, a former construction project manager for Stanford Management, is scheduled to be sentenced Aug. 4. A presentence conference is set for July 14.

Stanford is a full-service property management company specializing in affordable housing and providing diverse housing opportunities to families, seniors and people with disabilities in Maine and Pennsylvania.

The company received a total of more than $2.2 million in federal funds between 2013 and 2014 from the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture.

Gallagher was arrested on a federal warrant Aug. 19, 2015. After an initial appearance in court, he was released on a $10,000 unsecured bond, which will remain in place until sentencing. His release conditions include that he submit to supervision by and report for supervision to the U.S. Probation and Pretrial Services Office.

According to a federal investigator, Gallagher violated rules and regulations when he failed to disclose to Stanford 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.

According to Stanford’s records, from at least Dec. 2, 2013, to Jan. 5, 2015, 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, 2015, Gallagher claimed to have retained a construction company, Harley Construction, to perform work through subcontractors at Stanford properties in Maine.

The federal investigator stated that Gallagher owned Harley, a fact he concealed from Stanford by claiming that Harley was owned by Jon Branmeir. On Jan. 5, 2015, Stanford fired Gallagher, according to court documents.

Gallagher told a Stanford representative on Feb. 17, 2015, during an interview, that he and Branmeir started Harley six months prior to being hired by Stanford, the federal investigator wrote. 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 he did not because he saw it as a way to make money by acting as the general contractor on these projects, according to court documents.

He was paid a salary by Stanford 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,” according to the court document.

“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,” according to the court document.

Gallagher’s attorney, Sarah Churchill, attempted to get the case dismissed in December 2015.

“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.”

Gallagher was doing the same thing that another company did that was owned by a person linked to Stanford Management, she claimed.

The court disagreed and denied the dismissal.

dperry@sunmediagroup.net