Former Houston city treasurer pleads guilty to charges tied to federal embezzlement case

The former treasurer for the City of Houston entered a guilty plea on Friday to federal charges tied to the embezzlement of more than $1.16 million from the city and a Wasilla equipment company over a seven-year period starting in 2015.

Jess George Adams was employed until 2019 as the treasurer for the Mat-Su city of about 2,000 located along the Parks Highway.

Adams agreed to pay back roughly $275,000 he said he embezzled from Houston, according to a signed plea agreement filed in the case. He also agreed to pay back $966,000 he said he took from Alaska Electric and Control, where he was previously employed, and about $309,000 to the U.S. Treasury for tax evasion.

Adams bought at least eight cars, purchased firearms, spent $55,000 on Amazon purchases, withdrew more than $90,000 cash and spent about $60,000 at an auto repair shop, the agreement said.

He pleaded guilty Friday afternoon in U.S. District Court to charges of money laundering, tax evasion and two counts of wire fraud.

Adams was indicted in April by an Anchorage grand jury on 17 counts of wire fraud, eight charges of money laundering and six counts of tax evasion. The remaining charges will be dismissed at sentencing in accordance with the plea agreement.

Adams is scheduled for sentencing in January. Burke Wonnell, the federal public defender representing him, declined to comment on the case.

Adams used his access to City of Houston accounts to transfer roughly $275,000 to his personal account while he served as treasurer, the plea agreement said. He was hired in 2015 and was responsible for bookkeeping, which gave him access to the city’s accounting records and software, the agreement said. Adams had more than 30 years of bookkeeping and specialized training in tax preparation, it said.

Adams processed fraudulent vendor payments for fake expenses and routed money to his own bank accounts 78 times while employed by the city, the agreement said.

Adams was placed on leave from his treasurer position in 2018 and he resigned from the role in 2019, the agreement said.

The embezzlement set back the city back significantly, Houston Deputy Mayor Mike Adams said after Friday’s hearing. Mike Adams wasn’t in office when the embezzlement occurred, but said the city continues to recover from it. An auditor was hired to go through the finances and the city set up a new accounting system and software, he said.

The city council just met for the first time after local elections and “we’re finally comfortable with where the city is financially because we’re reconciled all of those former books,” he said.

The amount of money stolen represented a sizable chunk of the city’s budgets over the years, Mike Adams said, but it wasn’t felt as harshly because the embezzlement played out over several years.

After he left the city, Jess Adams began working as a bookkeeper at Alaska Electric and Control, which operates as Jewell Equipment Rental in Wasilla.

Starting in 2020, Adams made 159 fraudulent transfers into his own account from the company and tried to conceal them by deleting the transactions from records after the transfer was processed, the agreement said. In total, he transferred $888,000 to himself, according to the agreement.

Adams also paid his bills using company funds, issued himself a second paycheck and took more than $13,000 in cash, the agreement said.

He didn’t include the embezzled funds when filing tax returns and significantly underreported his earnings and evaded paying taxes, the agreement said.