A trail of broken glass: Former financial adviser allegedly scammed clients then fled

Sunday, September 25, 2011 at 10:05pm
Philip Russell 

On Monday, Oct. 3, 2010, Philip Russell, 56, told his wife that he needed to clear his head and walked out of his Brentwood condominium.

It was going to be an important week for him. On that Wednesday, he was set to stand trial alongside a pair of Kentuckians, Ken Kennedy, 66, and Ann Scarborough, 65, for allegedly defrauding approximately 20 people out of over $2 million.

Kennedy’s 60-year-old wife Sheila, who had masterminded the operation, pleaded guilty in March 2009 after she was arrested the year before at an Atlantic City casino. She was sentenced to more than 11 years in prison and has been ordered to pay restitution of approximately $2.6 million to victims. 

Hoping to escape Sheila’s fate, Kennedy and Scarborough arrived at the Estes Kefauver Federal Courthouse on Oct. 5. They claimed they were victims, but after a two-week jury trial, they were found guilty and faced up to 20 years in prison on fraud offenses and up to 10 years for money laundering.

Russell, however, wasn’t found guilty or innocent. He couldn’t be found period.

When he left his Brentwood condo, he simply never came back.


Phillip Russell was nondescript. Those who knew him called him “normal.” He didn’t stand out from the crowd, nor was he someone you would suspect of allegedly perpetuating a multimillion-dollar scam. You could look at his picture, stand next to him in line at the grocery store and still not know he is a wanted man.

For two decades he was trusted. He was a cog in the machine of personal finance. He presented himself as a person who would give you advice on the markets and investments and take a small return on success.

But a change happened that no one seems to be able to explain. He is accused of lying and scamming … and on the day he was supposed to face those accusations, he ran.

Before he fled, Russell operated Brentwood Financial, which was a registered affiliate of the brokerage and financial services firm Royal Alliance and had interest or ownership in a number of enterprises, including Avante Art Glass Gallery.

Formerly located in Green Hills, Avante sold high-end “art glass” to an upscale clientele. To obtain product meeting his standards, Russell regularly traveled to the source of quality art glass, Russia.

It was on one of these trips that the then-married Russell met his soon-to-be second wife, Irina.

Speaking to The City Paper, Irina said she last saw her husband two days before his trial was to begin. 

“Phil told me he needed to clear his mind before the trial and was going to check into a hotel,” she said. “I have two daughters of my own, one in college and the other in high school. There is so much noise here, he wanted to prepare.”

They talked by phone during those two days. 

“The last time I spoke to him was when he told me he was headed to the courthouse for the trial,” she said. “I haven’t heard from him since.”

Back at the courthouse, Nashville attorneys Will Hawkins and Jonathan Farmer were waiting for their client. 

When Russell failed to show, the judge wondered aloud if Russell could be tried “in absentia” alongside the present Kennedy and Scarborough. Hawkins and Farmer pointed to case law that argued against it and then promptly requested to be able to withdraw from the case. Haynes agreed with them on both counts.


Among the victims of Sheila Kennedy and, allegedly, Russell are Don Cox of Franklin, Tom McGee of Cowan, Tenn., and the business Dental Bliss of Franklin.

Like Russell, Cox also married a Russian national. An AT&T retiree, Cox had traveled to Russia to help with ongoing infrastructure issues after the fall of the Iron Curtain. It was while living there that he met his wife.

Back in Nashville, Cox’s wife began to socialize with other Russian-born women living in Middle Tennessee. At a social gathering in 2006, she met Irina Russell, who told her that her husband was a broker/financier.

Don Cox was looking to invest. He wanted to get his house paid off and leave a nest egg for his wife and their child. Russell, according to Cox, was somewhat boring and businesslike and seemed trustworthy.

The two men and their wives socialized some, but in August of that year Russell approached Cox with a sure-fire business opportunity. According to Russell, his “client,” Sheila Kennedy, was an expert real estate investor who was helping the Walt Disney Co. purchase land for a theme park in “the northern quadrant of Davidson County.”

Russell told Cox that for an investment of $60,000, he would earn $120,000 in six months, noting that proximity to a Disney park would cause property values to skyrocket. 

On Aug. 6, 2006, Cox — feeling confident Russell was trustworthy — delivered a check for $60,000 to Russell. In return, he received a promissory note signed by Sheila Kennedy guaranteeing him payment of $120,000 by Dec. 31, 2006.

Cox said he never met Kennedy face to face, but had no reason initially to doubt Russell. He was told that Disney chose Nashville for a theme park because “it was about halfway from New York to Florida.” The story made sense to him.

January 2007 arrived, but a check from Russell or Kennedy to Cox did not. Contacted by Cox, Russell explained that he was out of town and his secretary must have forgotten to mail the check.

After some badgering, Cox finally got a $60,000 check in February 2007. It bounced. Russell explained that it must have come from the wrong account and it was a mistake. In April, a check for $120,000 arrived. That one bounced, too.

Cox kept calling and getting nothing but excuses. The Disney land deal was on hold, he was told, and a new location was being scouted. Meanwhile, Cox didn’t make excuses to his bank; he had to go back to work. For the next couple of years, the retired AT&T employee worked for Rivergate Toyota until his debt was paid off.

Cox doesn’t expect to ever see any of the money he gave Russell. He just wishes he had taken his own advice: “If it is too good to be true, then it is.”

Unlike Cox, Tom McGee had actually made money with Russell over a period of almost 20 years.

In 1987, Russell was employed by investment firm Hilliard Lyons, and among his clients was McGee, an engineer who at the time lived in the Nashville area. McGee was impressed enough with Russell that he had his parents move their money to be managed by him as well.

When Russell decided to open his own financial services firm, many of his Hilliard Lyons clients followed him, including McGee.

Over the next several years, McGee not only invested with Russell but went into business with him, including a gourmet food home-delivery service — Charcoal Charlie’s — located in Green Hills. That business failed, but McGee said he doesn’t blame Russell. 

“We knew the risks going into the restaurant business,” McGee said. “Most of them fail. We learned good lessons. No one was to blame.”

Other businesses were more successful, including Russell-McGee, which imported hand-painted glass Christmas ornaments from Russia and blown glass from Eastern Europe. The working relationship turned into a friendship, with Russell and his first wife socializing regularly with McGee and his wife over the next 15 years.

Asked if he ever noticed a change in Russell, McGee said things started getting strange when Russell divorced his first wife.

“He told me that she had become a ‘religious fanatic,’ and he couldn’t take it anymore,” McGee said.

After Russell left his first wife and married Irina, McGee saw other changes he never expected.

“It was a complete sea change and should have been more of a red flag,” according to McGee. “He went from being a conservative Republican to a very liberal Democrat. People at our age don’t change their political views that radically that suddenly. There were other things, too. For example, he started claiming the Cold War was a hoax.”

As with Cox, Russell approached McGee in 2006 and told him of the supposed Disney theme park. 

McGee told The City Paper, “I had known him almost 20 years and had made money with him, been in business with him. I had no reason to doubt him or the Disney story.”

In April 2006, McGee wrote a check to be used by Russell and Sheila Kennedy for the land deal. Like other “investors,” he too received a promissory note signed by Kennedy.

In 2007, McGee started to inquire about his money. True to form, Russell and Kennedy sent him checks that bounced.

McGee says he pressed for answers but was met with stories that ranged from the heartbreaking to the incredible. On one occasion, he was told that Sheila Kennedy had been diagnosed with pancreatic cancer. McGee backed off for a while.

After a while — apparently concerned his excuses were no longer effective — Russell told McGee that Sheila Kennedy was about to inherit a $1 billion estate from a grandfather who had fled Russia prior to the 1917 Bolshevik Revolution, and his money would come as soon as her money was released by New York lawyers.

McGee kept calling for his money — but Russell quit calling back.

During the same time that Russell and Sheila Kennedy were dodging phone calls from McGee and Cox, they were living the high life.

According to Russell’s federal indictment: “In 2006 and throughout 2007, Kennedy and Russell also began traveling together — and sometimes with others — to New York, the Caribbean, Mexico, and elsewhere and spending lavishly on consumer goods and luxury accommodations, while also gambling. In most cases, their spending (via credit card, checks, and ATMs) resulted in their accounts being overdrawn, defaulted and ultimately closed, with a loss suffered by the financial institutions. During this time, Russell also abandoned Brentwood Financial, resigning from Royal Alliance in late December 2006.”

While she was in New York, Sheila Kennedy’s husband, Ken, stayed in Kentucky and kept defrauding people and then sending the money to his wife and Russell, according to the indictment. 

In April 2007, though, the pair returned home to get some work done.  

On April 26, Kennedy and Russell walked into Dental Bliss, a Franklin-based luxury “dental spa” that offers services ranging from massages and acupuncture to restorative dental work. 

The pair told the staff they were in a hurry and wanted to come back the next day to get crowns and veneers for both of them. The staff granted the request, cleared their schedule, and told the pair to come back the next day. In return, Kennedy and Russell presented a check for $96,637.80 

The following day Sheila Kennedy began getting her dental work done, a time-consuming process. Russell was supposed to go through the same process, but before he could and before Sheila Kennedy’s permanent teeth could arrive and be fitted, their check bounced. 

Dental Bliss contacted Russell and Kennedy, attempting to receive payment. After the pair’s excuses, explanations and threats to “take their business elsewhere,” Dental Bliss never got its money. In return, Kennedy never got her final work done. 


As of this writing, Russell remains on the run, wanted by federal agents and facing charges of money laundering, wire fraud and mail fraud.

On Jan. 13, 2011, Russell was indicted again for failing to appear in federal court. 

Asked where Russell might be, both Cox and McGee speculate he is living somewhere with another woman, most likely someone unaware that his is a fugitive. They said he was known to troll the Internet trying to meet women.

McGee said that in a conversation years ago Russell told him there are always places to hide your money where the IRS can’t find it, including the Cayman Islands and the Isle of Wight.

McGee believes Russell is sitting on a couple of million dollars and that he “got the upper hand on Sheila.” He also thinks he ran because “he didn’t want to face his former friends or go to jail.” When asked where he thought his former friend and financial adviser is hiding, McGee said, “In order: Mexico, England or Russia.”

Until he disappeared, McGee said Russell claimed he too was a victim of Sheila Kennedy’s.

For her part, Irina Russell thinks her husband is just that, a victim of the Kennedys. Asked his whereabouts, Irina said, “He doesn’t know Russian so well that he could survive, so I don’t think he is there. I think he is somewhere in the United States, living with a woman he would have met at [an art glass] show.”

Irina Russell said she has cooperated fully with federal agents. She did not express concern that she might be deported now that her husband is missing. She said she would like to return to Russia but her daughters are happy in the States.

When asked what she would do if Phillip Russell unexpectedly showed up on the doorstep of their condo, Irina hesitated for a moment, then said she’d let him in.

“I still love him.”   

5 Comments on this post:

By: wataboutbob on 9/26/11 at 5:49

Is this becoming a movie?

This story could have (and should have) been reported with one-third the details, such as the meaningless personal drivel towards the end.

By: jonw on 9/26/11 at 5:16

I,for one, thought the details were very interesting - - even the "personal drivel" at the end.
As for a movie, I think it would sell . With Foreign intrigue, suspense, triangle love affairs, mystery, graft.,- - - - just think of what John Grisham could do with this.

By: govskeptic on 9/27/11 at 6:18

$120,000 in a few months for your $60,000. investment? It's always these
kind of stories where there is a victim I just can't feel sorry for! Anyone
making above minimum wage should know this type outrageous return
is a scam or part of some criminal enterprise to run from-not speculate on.
Stories concerning these Eastern European wives of recent vintage seem to
require a great deal of overspending of one's own or someone else money
appear to have a common theme as well Oh, how that brain moves around!

By: Jack Straw on 9/27/11 at 8:01

Testing -- trying to get a new password here is enfuriating.

Who are these young geniuses who write software that leaves us old fogies so clueless?

I'd like to meet one of those geniuses, because I'm smarter than 99.7% of the general population myself, and these smartass twerps confound me with their cryptic instructions, UTTERLY.

By: Jack Straw on 9/27/11 at 8:02

OK, so I must have done something right.

What it is, I still haven't got a frickin' clue!