John D. Gill, J.D., CFE
ACFE VP of Education
The stories are true. When a three-inch thick steel door (operated by a correctional officer behind bullet-proof glass) closes behind you with a deafening metal “thud,” you realize you are in a different world. You are not free to do as you like. Where you go, where you sit and what you can carry on your person are tightly controlled. And although this seems eerily similar to flying on a commercial airliner, this environment was completely new to me, because, as I will explain, this was my first stint in prison.
Fortunately for me, my time “in the joint” only lasted a couple of hours. I traveled to Livingston, Texas, to visit a prisoner, Steven Jay Russell. Russell stole about $800,000 from his employer, and now he is serving a life-sentence in a Texas maximum-security prison. Now Texas does have a reputation for stiff sentences, but the life sentence was not for the fraud he originally committed. You see, Steven escaped from prison four times. And as he found out, the state of Texas does not take kindly to its prisoners walking out the door without permission.
Russell’s case has obtained some notoriety. He has been the subject of several articles and a book: I Love You Phillip Morris: A True Story of Life, Love, and Prison Breaks by Steve McVicker. The book was adapted into a movie in 2009 starring Jim Carrey and Ewan McGregor.
I wrote to Russell earlier this year to see if he would be interested in talking to me. It might surprise you to learn that I write to convicted fraudsters quite often. Before the ACFE was founded in 1988, Dr. Joseph T. Wells, CFE, CPA, discovered that a great deal can be learned about fraud by talking to the people who commit it. He and Jim Ratley, CFE, have interviewed dozens of offenders, and they were fortunate enough to have videotaped most of these. These clips have been used in our training courses for more than 25 years.
I have also enjoyed interviewing fraudsters. You can learn a great deal about what motivates these individuals. In Russell’s case, it was simple greed — he wanted money.
Originally, he had a good job working for a food service business, but he was fired (he alleges) for being homosexual. To earn money, he began a series of insurance frauds – mainly “slip and fall” cases in retail stores. He soon got caught and received a three-year sentence. While in prison, he met Phillip Morris, and they fell in love. Later, Russell and Morris were released on parole and started a life together. But Russell did not want to settle for second-best.
Needing a generous income, Russell falsified his résumé to get hired as a chief financial officer for a medical management company. This company typically made payments to physicians on behalf of insurance companies. If a payment was returned by a doctor because it couldn’t be verified, Russell would simply deposit the check in a separate company bank account he opened. He withdrew money from this account to fund his increasingly lavish lifestyle. Over the course of just a few months, he stole around $800,000.
He wasn’t caught by management, internal audits or external audits. He was tripped up when he used funds from the company account to refinance his home mortgage. The bank thought it suspicious that funds for the down payment were coming from a business account. They called the company to verify, and the jig was up.
Russell received 45 years for his embezzlement, but not to be deterred, he escaped soon after by using highlighters to dye his prison uniform green and walk out of the prison infirmary posing as a doctor. But this ingenious escape did not stop him from getting caught and going back to prison. His escapes and frauds are chronicled in the book and the movie. He faked an AIDS diagnoses and symptoms to escape from a treatment center, and he posed as an attorney, a judge and an FBI agent to get either himself or Morris transferred or released from various confinements.
Ultimately, he was sentenced to more than 150 years in prison for both the frauds and the escapes. His release date is July 12, 2140. Presently, he is in solitary confinement, and has been for the last 18 years. He is released one hour a day to shower and exercise. He has no physical human contact whatsoever. When I spoke to him, Russell was sitting in a small booth with bullet-proof glass in the front and steel bars in the back. We spoke using telephone receivers beside the glass.
Amazingly, he is not bitter. In fact, I found him quite likable. He says solitary has given him a lot of time to think (no argument there), and he is certain that he will not repeat his mistakes. He says that despite his long sentence, he is hopeful that he may get paroled in the next five years. I would love for him to speak at an event to illustrate that sometimes trust can be misplaced. Russell was a master at gaining trust, and then using that trust for his own purposes. Listening to his story is a reminder to stay on guard, and that even the most likable person can have an ulterior motive.
I am asking the prison officials for permission to conduct a video interview to record more about his story and share it with ACFE members.
If you know of a fraudster who might be willing to be interviewed, please contact me at JGill@ACFE.com. I am looking for anyone who is willing to talk. I am willing to interview them almost anywhere, but I’ll have to confess, I would rather interview them in a hotel meeting room, and not behind barbed wire and steel doors. My few hours in a maximum security prison were enough for me to give up all my criminal plans.