A demon did take the form of C.T. Russell and have relations with the unbelieving wife of an Australian brother:
Brother Nicholson, of the Australian branch, writes us of an astounding circumstance. One of the Australian Brethren has a wife who is neither for nor against the truth, and who professes no sympathy for Spiritism. Quite recently the brother, returning to his home, had a harrowing tale related by his wife. She declared that Brother Russell had appeared to her. (Possibly she had seen his photograph.) She declared that he made improper proposals, to which she yielded.
At such a distance it is easy enough to prove an alibi - to prove that the Editor was not there. But suppose the materialization in all of its particulars had transpired in Brooklyn, or in the Bethel home, or in any of the various cities which the Editor visits in the preaching of the gospel, or in a Pullman sleeping ear, in which he frequently travels - it is easily seen that such an alibi might be very difficult to prove in such cases. And what would be true in this respect of the Editor might be true in some respects of many of the pilgrim brethren: yea, true of all of the Lord's people everywhere.
quoted from January 1911 WT