Jury Convicts Sacramento Man of Fraud in Connection with Arson Scheme

SACRAMENTO, Calif. — After a four-day trial, a federal jury found Brian J. Stone, 59, of Sacramento, guilty today of 13 counts of wire and mail fraud, U.S. Attorney McGregor W. Scott announced.

According to evidence presented at trial, Stone devised a plan to get fire insurance money from State Farm based on false statements about who had performed cleanup work after a fire at 2764 Fulton Avenue in Sacramento in June 2013.

In late 2012, co-defendant Jamal Shehadeh had rented space at that location in the name of a supposed auto parts supply business. Stone, a disbarred attorney, had been helping Shehadeh unsuccessfully fight an eviction action during the months prior to the fire. On the night the eviction took effect, the fire occurred at 2764 Fulton, and the supposed auto parts business later filed an insurance claim with State Farm. While helping with the insurance claim, Stone recruited a local contractor to create a fake invoice and lie to State Farm regarding debris removal work performed after the fire. In a series of emails, Stone directed the local contractor to keep 10 percent of the money that they would get from State Farm from this fraud, and send the other 90 percent to Stone in a cashier’s check.

The scheme was uncovered when the local contractor reported it to State Farm. The FBI later executed search warrants of Stone’s office and email account, finding copies of documents outlining the fraud.

This case is the product of an investigation by the Federal Bureau of Investigation and IRS Criminal Investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Sacramento Fire Department; the Sacramento Metropolitan Fire Department; and the Sacramento Sheriff’s Department. Assistant U.S. Attorneys Michael D. Anderson and Christopher S. Hales prosecuted the case.

Two other defendants were charged in the same case. Jamal Shehadeh pleaded guilty to two counts of arson to commit a felony on February 10, 2018, including the 2764 Fulton Avenue fire, and was sentenced to 30 years in prison. Charges against Saber Shehadeh are pending with trial scheduled to start on May 14, 2018. The charges against Saber Shehadeh are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Stone is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on July 12, 2018. Stone faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.