NETCADA director arrested on felony
Kerry Craig | News-Telegram Assistant Editor

Police in Paris arrested the executive director of North East Texas Council on Alcohol and Drug Abuse [NETCADA] on charges of forgery of a financial instrument Tuesday after the agency's board of directors learned it would not be able to meet payroll last week.

The story began unraveling when James Craig Arneson, 70, announced he would leave his position prior to the planned April 30 retirement, according to Allan Hubbard, a member of the NETCADA board and victim coordinator for the Lamar County district attorney's office.

"On the 14th of April, he came in with his wife and said his last day was that day," Hubbard said. "The staff got a little concerned and started looking at some stuff ... we've had some other things kind of come to our attention through means I really cannot go into right now."

The NETCADA board had already named Gloria Phillips, long-time financial officer, as the new executive director, and Phillips found some things that did not look right.

"She started going through things and found some improprieties in the checkbook and in the check register in the computer," Hubbard said. "We called Paris police and they started an open investigation on April 14 into the allegations of forgery of a financial instrument."

Hubbard said an emergency board meeting was called to ensure the payroll went as scheduled and to look for the problem.

"The board had an emergency meeting the next morning and voted to obviously assist the investigation in any way that we could," he explained. "There are some other issues of finance - we did not think there was enough money to cover payroll, which was due that day, so we did some things to make that happen and had to make some emergency things happen that day."

NETCADA, which has been in existence since 1975, operates with a $1.5 million annual budget. A majority of the funding is derived from grants from the state's department of health services to serve residents through the area who have alcohol and drug problems. The NETCADA board, according to Hubbard, was in a state of shock over the developments, but was unified in its resolve.

"There is no board member that has resigned. We stand unified, concerned ... shocked is the primary thing," Hubbard said. "Obviously, we are not jumping to a conclusion that [Arneson] is guilty, and we are shocked because the board was never, ever led to think that we were in anything other than not perfect financial shape."

The NETCADA board meets monthly and every financial report presented to the board indicated things were fine, enough so that a new office in Sherman was opened, joining offices in Sulphur Springs, Mount Pleasant, Bonham, Mount Vernon.

"It was very shocking," he said. "The first thing we did was jump to the aid of the employees because last Thursday was the day the checks went out to be done the next day for payroll."

Hubbard said he was not aware of any other employees possibly being involved with missing funds from the agency, but three other employees did have access to NETCADA accounts.

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