Wallace is focus of AG inquiry

A spokesman for Attorney General Martha Coakley confirmed that her office is investigating Wallace, a Democrat, based on a recent finding from the Office of Campaign and Political Finance, which said it refers only two or three cases a year.

A May 14 letter from the campaign finance office cites evidence of several misdemeanor campaign violations by Wallace; his wife, Lauren; his campaign treasurer, Timothy Duross; and Billy Mead, a South Boston businessman.

Wallace acknowledged that campaign finance officials were investigating him when he announced his retirement in March, but said at the time: “There is nothing nefarious there. This certainly played no part in my decision.’’

He said he was retiring because he wanted to spend more time with his family and on his writing.

Wallace’s attorney, William A. McDermott, said in a statement: “Brian Wallace has done nothing to warrant an investigation by the attorney general, and he looks forward to working with the attorney general to determine that.’’

Duross and Mead could not be reached for comment; messages left at their attorneys’ offices were not returned.

The letter from campaign finance officials says evidence suggests that from 2007 through 2009 Wallace and his campaign committee failed to preserve records, used campaign funds for personal expenses, took in contributions above the $500 limit, failed to file some reports, and violated a rule requiring that expenses above $50 be paid with a check or credit card. The statutes governing the potential violations carry penalties of up to six months to one year in jail and fines of between $500 and $1,000.

Neither Coakley’s spokesman, Corey Welford, nor a spokesman for the campaign office, Jason Tait, would elaborate on the details of the investigation, saying that it was ongoing.

The letter cites evidence against Mead for a single violation, exceeding the $500 limit on campaign contributions.

Mead is not listed as a contributor on any of Wallace’s official campaign finance filings with the state.

Duross is cited for a number of violations, including exceeding the contribution limit, making personal use of campaign funds, and using a campaign debit card to obtain cash, which is specifically prohibited under state law.

Wallace’s campaign finance records show cash reimbursements to Duross in 2009 totaling $13,675.11, without any purpose listed, as is required by law. The records also show a total of $581 in ATM withdrawals.

Someone listed in the records as Laurie Wallace received payments from the account in 2009 totaling $3,144.15, with various purposes listed.

Wallace, a former aide to Mayor Raymond L. Flynn who has served in the House since 2003, is a South Boston native and is known for his affability and deep knowledge of the neighborhood’s history.

When he announced his retirement from the Fourth Suffolk District seat in May, Wallace acknowledged that he had some unspecified health issues and said he had lost a little bit of his political drive.

“When it’s time, you know,’’ Wallace said. “I didn’t feel it in my stomach to do it anymore. If you don’t have a fire in your belly, then you really shouldn’t do it.’’

Tait said the Office of Campaign and Political Finance refers only its most serious cases to the attorney general’s office. Most reports of violations are resolved through internal agreements or letters that can include civil penalties.

Noah Bierman can be reached at nbierman@globe.com.