FARMINGTON — A Jay man pleaded not guilty Friday in a Portland court to a felony charge of embezzlement from an organization receiving federal funds, according to U.S. District Court documents.

Timothy P. Gallagher, 46, an ex-construction project manager for Stanford Management LLC, is accused of embezzling nearly $80,000 from a federally-funded program between about May 2014 and Jan. 5, according to a court complaint.

Gallagher was indicted Nov. 4 on the charge by a federal grand jury in Portland.

Gallagher was arrested on a federal warrant on Aug. 19. He made an initial appearance in U.S. District Court that day and was released on a $10,000 unsecured bond.

The U.S. Department of Housing and Urban Development Office of the Inspector General had been investigating Gallagher since April for federal program fraud, according to a criminal complaint filed by Stephen P. Tufts, a special agent on the case.

The investigation revealed that Stanford Management manages several federally-funded properties. Stanford received and held in its care, custody and control more than $372,000 combined in 2013 and 2014 from HUD. It also received and held in its care, custody and control about $2 million in 2014 from the U.S. Department of Agriculture, according to the complaint.

Stanford 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 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 oversight of the scope, direction, monitoring and completion of at least nine Stanford construction projects. Between May 2014 and Jan. 5, Gallagher claimed to have retained a 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,” the complaint said. On Jan. 5, Stanford fired Gallagher,” it said.

Gallagher told a Stanford representative on Feb. 17 during an interview that he and Branmeir started Harley six months before 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.

A trial has been set for Jan. 4, 2016. A conviction on the charge carries a maximum penalty of up to 10 years in prison and a fine not to exceed $250,000, or both.

Gallagher’s attorney Sarah A. Churchill declined to comment on the case Wednesday.

dperry@sunmediagroup.net