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Prison and $80K Restitution For Man Convicted of Federal Felony Fraud

A man from Jay was sentenced to a year in prison today for embezzling federal funds that were supposed to go to low income housing in Maine. Timothy P. Gallagher pled guilty to the felony fraud charges, which stemmed form his time as a construction manager for a Portland construction company that was receiving federal Housing and Urban Development funds.

Don Clark, a spokesman for the U.S District Attorney’s office says that, as construction manager, Gallagher hired another general contracting company — which he secretly owned — to hire subcontractors to do the actual work.

“The reality is no general contractor was required for any of these jobs, so what he did was essentially put a 46 percent profit margin on all of the underlying costs and collect it himself,” Clark says.

In addition to the jail sentence, a federal judge ordered Gallagher to pay restitution of nearly $80,000 for the money he skimmed. Gallagher could not be reached for comment.