EMS director Jim Russell, wife Carla arrested by Texas Rangers

Charges allege financial abuse or misconduct exceeding $300,000


Acting on an investigation that began in September of 2015, the Texas Department of Public Safety through the Texas Rangers issued warrants on Monday for the arrest of Gonzales County Emergency Medical Services (EMS) director James (Jim) Russell and his wife Carla. The two were arrested on Monday, booked into the Gonzales County Jail, and then released after they posted the provisions of a $50,000 cash bond.
The husband and wife duo that have run the Gonzales County EMS for many years were charged with mismanagement of funds for the organization. According to DPS Sgt. Deon Cockrell, each were charged with one count of misapplication of fiduciary property or property of a financial institution. Both individuals voluntarily turned themselves in Monday to the Gonzales County Jail. Bonds were set at $50,000 and they were released later that day.
Jim Russell had been placed on administrative leave without pay in January pending the outcome of the investigation by the Rangers and the Drug Enforcement Agency. By order of EMS Board of Directors Chairman Gilbert Philippus, Carla was allowed to remain in her position as the bookkeeper until at least Monday of this week.
According to the Texas Penal Code, a person who commits the above offense if they intentionally, knowingly, or recklessly mis-applies property they hold as a fiduciary or property of a financial institution in a manner that involves substantial risk of loss to the owner of the property or to a person for whose benefit the property is held. Charges begin as a Class C misdemeanor if the amount is $100 or under, all the way up to a felony of the first degree if the value of the property misapplied is $300,000 or more.
According to affadavits for search warrants of the EMS office and the Russells’ personal home, questions have come up about missing, misappropriated or questioned finances in excess of $340,000; alleged medical narcotic drug use; missing social security taxes paid by employees; missing medical insurance monies paid by employees; personal purchases of personal property paid out of EMS funds, including a new roof on the Russells’ house in the amount of $7,300 and a bull in the amount of $2,200; missing donations of two checks in the amounts of $200,000 and $46,000 respectively; and multiple allegations of double dipping in pay.
According to the official arrest warrants, the investigation began after a Sept. 10, 2015 meeting between Gonzales Police Department Sgt. Bethany McBride and an EMS medical technician. The EMS technician was concerned about possible misappropriation of funds stemming from actions involving James and Carla Russell. The technician wished to remain anonymous at the time, fearing possible retaliation by the pair, along with being fired by EMS.
A short time later, another EMS employee joined that conversation, adding suspicions about financial dealings within the company, and repeated the fear of being a whistle blower for fear of losing their job.
Another concern brought up to McBride was the insurance program for EMS employees. She was told that James Russell had been making certain full-time employees “part-time” because he was unable to pay their insurance. Meanwhile, members of the Russell family were employed by EMS — who were receiving full time paychecks while not working full-time shifts — and were receiving “the best insurance.”
McBride advised the employees and their coworkers to gather as many of their pay stubs as they could and report back to her.
On April 21, 2017, Texas Ranger Raymond Benoist Jr. was contacted by the Gonzales Police Department regarding the case. On May 15, 2017, Benoist interviewed an EMS employee regarding donations to EMS for new equipment that did not materialize. The employee informed the Ranger that a local citizen had approached James Russell and inquired about the cost of a new ambulance. Russell said the ambulance would cost $200,000. The citizen wrote a check to Gonzales County EMS for that amount. It was later discovered that only $80,000 was used to refurbish an older ambulance without purchasing a new one. The investigation, along with bank records, did not show a deposit of either $200,000 into any bank account associated with Gonzales County EMS. It is not clear if the entire $200,000 is missing or misplaced, or only $120,000.
The same day, Benoist interviewed another Gonzales County EMS employee who said that medical insurance coverage for Gonzales County EMS employees had been cancelled, due to non-payment by James Russell. The employee also said that James Russell has used leftover narcotics from medical calls for personal use and provided documents that showed both James Russell and Carla Russell were double dipping with regard to their pay. The employee claimed James Russell would be assigned to an ambulance, while simultaneously being scheduled as a supervisor, and being paid for both. Additionally, the employee said that Carla Russell would be assigned to an ambulance but would carry out her bookkeeping duties while being simultaneously paid for both duties.
In May 2017, Benoist received subpoenaed records for Wells Fargo bank that listed James Russell and Carla Russell as the only signers for the account, as well as listing their personal post office box as the account mailing address. It was determined that this account did not have any connection to accounts related to Gonzales County EMS but funds for EMS were being deposited in this account.
Further investigation showed this account was labeled as EMST, used exclusively by James Russell and Carla Russell to deposit checks made out personally to them for teaching CPR and first aid classes to the following Gonzales County entities: Gonzales Independent School District, BYK Inc. chemical plant, Kitchen Pride Mushroom Farm, City of Gonzales, S & K Electrical, and Emmanuel Fellowship and School for a total of $21,040. The investigation of this account how shows the EMST account was used exclusively by James Russell and Carla Russell for personal purchases unrelated to Gonzales County EMS business, including the purchase of a livestock bull for $2,200 and a new roof for their personal residence at a cost of $7,411.
On Dec. 11, 2017, Benoist interviewed an EMS employee who said that in October 2016, Gonzales County Rescue — a group of volunteers falling under the umbrella of Gonzales County EMS — hosted a haunted hay ride fundraiser to raise money for the EMS to purchase two automated external defibrillators (AEDs) for the Gonzales County Sheriffs Office. The employee said at the conclusion of the event, the raised funds were turned over to the possession of James Russell and Carla Russell and that to his knowledge, the AEDs were never purchased and that he had not seen any new AEDs related to being donated to the Gonzales County Sheriffs Office.
Further investigations by Benoist showed that the Gonzales County Sheriffs Office had not been presented with donated AEDs by Gonzales County EMS and the employee did not know where or what the raised funds were utilized for. The investigation showed that approximately $1,464 was raised from the hay ride and bank records do not show a deposit of that amount being deposited into accounts related to the finances of Gonzales County EMS.
On Dec. 27, 2017, Benoist interviewed the Gonzales County ESD board president who said that for approximately 15-20 years, James Russell wrote the bid specifications for the Gonzales County ESD, as well as determined the content of the bid, and that James Russell also bid through his company on the same contract the he wrote for the Gonzales County ESD Board to provide Gonzales County with EMS services. The president said that during his tenure on the ESD board, an audit had never been conducted in relation to the funds used for Gonzales County EMS and that he was not aware of Gonzales County EMS credit cards or credit accounts being cancelled due to nonpayment. He also told Benoist that he was not aware of a donation for the amount of $46,000 made to Gonzales County EMS for equipment by a citizen of Gonzales County. Further investigation showed that the donation check was never deposited into any account associated with Gonzales County EMS, nor was it ever shown as a donation on the minutes from the ESD board meetings.
The investigation revealed that the bank used by citizen who made the donation provided authorities a copy of the cashed check but was unable to provide the information related to the bank where the check was cashed. He informed Benoist that he was not aware of James Russell or Carla Russell receiving checks written to them personally by previously listed Gonzales County entities to provide a Gonzales County EMS presence at events, while simultaneously being on the clock, and compensated by Gonzales County EMS funds. He said that based on the contract between the Gonzales County ESD board and Gonzales County EMS that in his interpretation, that was a contract violation as well as a criminal law violation for James Russell and Carla Russell to be compensated by another entity while simultaneously being on duty and paid by Gonzales County EMS using Gonzales County funds.
He also stated that regarding the Wells Fargo EMST bank account previously discussed, he interpreted the use of that account by James Russell and Carla Russell to be a violation of the emergency service district contract along with being a violation of criminal law. That because James Russell and Carla Russell received funds in the form of checks written to them personally, instead of Gonzales County EMS from local entities for providing the CPR and First Aid classes, and the investigation showing those funds were deposited into their personal account (EMST), which has been shown to have no connection to Gonzales County EMS bank accounts, and solely used for the Russell's personal gain, that they are stealing and misapplying funds related to Gonzales County EMS.
Search warrants were also conducted on the residence of James and Carla Russell and the Gonzales County EMS building in order to obtain any evidence for the investigation.
The Gonzales Inquirer has learned that Carla Russell was kept in her position as financial bookkeeper at the order of EMS board chairman Gilbert Philippus. Philippus was told by employees at EMS that this was a bad move and would not look good in the community, but his response was the “she does not work for EMS, she works for the Board.” Russell was still the bookkeeper until she was arrested on Monday.
Employees have also claimed that James Russell specifically prohibited them from contacting board members about issues relating to EMS, and he strictly forbid employees from attending regular board meetings.
The paper has also learned that a special meeting has been scheduled at the EMS building in Gonzales for Thursday evening at 7 p.m. An executive session to discuss personnel and legal matters is the subject of the meeting.
As far as any further investigation into this case, or whether anyone else is under investigation, DPS Sgt. Cockrell stated: “this is an ongoing investigation, and so as not to jeopardize the integrity of the investigation, no other information will be released at this time.”
(Editor’s Note: the search warrant affidavits for the EMS building and the Russells’ home, along with the arrest warrant, can be found here.)