Mint Hill’s former Fire/EMS operations director and chief of the Mint Hill Volunteer Fire Department has agreed to plead guilty to embezzling more than $225,000 from the Town of Mint Hill and the Fire Department, Anne Tompkins, U.S. attorney for the Western District of North Carolina, announced this week.
The FBI’s Charlotte division has been investigating Jeremy Russell, 38, since April, when the Mint Hill resident resigned after being placed on disciplinary suspension. Staff found “irregularities” while reviewing the contents of his town-issued email account, Town Manager Brian Welch said then, and called the FBI. The town, which lost an estimated $21,000, has not been under investigation, Welch said this week.
Russell, a father of four, used the stolen money to fund a “gambling habit” and his “personal lifestyle,” according to a news release from the U.S. Attorney’s office in Charlotte. He was employed by Mint Hill for 17 years and his ending salary was $79,684. He became fire chief in 2007.
The town named EMS Assistant Chief David Leath Fire/EMS operations director, and the volunteer board appointed Deputy Chief John Phillips to fire chief.
Russell stole the money in small increments from May 2010 to April 2012, primarily by setting up a sham corporation – Regional Medic & First Responder Supply Connection – and a corresponding bank account and P.O. box he controlled, according to the felony embezzlement charge filed Tuesday, Nov. 27, in U.S. District Court in Charlotte. According to the court document, Russell submitted bogus invoices from Regional Medic for equipment and services never provided to the fire department.
Russell generally kept the invoices to amounts under $5,000 and got the corresponding checks signed off by those at the town and fire department with payment authority. Russell picked up the checks at the mail drop and then deposited them into the bank account in Regional Medic’s name, according to the news release.
According to the plea agreement, Russell also has agreed to pay restitution. He could face up to 10 years in prison and a $250,000 fine. A plea hearing in the U.S. District Court hasn’t been set.
Russell took about $21,000 from the coffers of the Town of Mint Hill, leaving the bulk of the embezzlement against the volunteer fire department, Welch said. The fire department maintains its own governing board but also has town-paid employees. The department receives funding from the town, federal government and donations from taxpayers.
For the town’s share, Russell submitted “several” fake invoices for new uniforms for the department’s town employees, Welch said.
Welch signed those checks, he said, noting that he’s not the only one who reviews invoices to be paid. But no one suspected anything illegal, he said.
“I am not happy about the fact that it happened and I’m certainly not happy that taxpayer dollars weren’t used for what they were designed to be used for,” Welch said. “You put your trust in folks and sometimes it doesn’t work out.”
The town hasn’t altered its payment policy since, Welch said.
“What we have in place now is what we had in place then. It wasn’t broken,” he said. “You’re never going to be able to truly eliminate the human element … I trust department heads to manage their departments. If I sign a check for $3,000 for uniforms, I assume that they have those uniforms.”
A check of proof of supplies received for every invoice would be “inefficient at best,” he said.
But that’s exactly what the fire department has been doing since the FBI confirmed in June they were investigating Russell, department Board Chairman Jerry Mullis said.
During the nearly two-year period, Russell submitted fake invoices to the department’s volunteer board for firefighting supplies like tools and medical supplies for its ambulances.
Mullis and the board treasurer reviewed and signed those checks.
With Mint Hill being the only fire department that transports patients to local hospitals, Mullis said large bills never raised any red flags.
The department’s 2012-13 budget is about $800,000, Mullis said.
“We see a lot of expense to us,” Mullis said. “As we signed off on these (checks) of course we thought ‘Gee, it costs a lot of money,’ but it does cost a lot. We never considered that we were being embezzled against.”
Now, when supplies are ordered they must be signed off for when they’re delivered at the station. They’re immediately placed in a secure area and multiple people check invoices against the supplies received, Mullis said.
“No bills are paid until all of those steps have been taken,” he said.
Despite the challenges, Mullis said services to the community weren’t diminished.
“We did not miss a beat on providing the service we give to our community, both fire and medical,” he said. “We just continued the operation we continued for years with one less individual.”
Russell’s embezzlement, however, means the department lost not only a friend, but a skilled firefighter, Mullis said.
“There is so much friendship and camaraderie in the department and Jeremy had a lot of that. He had done great service to our community. It’s definitely a shock to all of us,” he said. “I’m sad for his family. I’m just disappointed that this has happened.”