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Published On: Sat, Sep 29th, 2018

Former Sacramento lawyer sentenced in arson, fire insurance fraud scheme with Jamal Shehadeh

U.S. District Judge Morrison C. England Jr. sentenced Brian J. Stone, 60, of Sacramento, to six years in prison and to pay over $243,000 in restitution and a $12,500 fine for his convictions on 13 counts of wire and mail fraud, U.S. Attorney McGregor W. Scott announced. After sentencing, Stone was remanded into custody.

Stone was formerly a California attorney but was disbarred in 2001. According to evidence presented at a four-day trial and at sentencing, Stone participated with co-defendant Jamal Shehadeh in a multiyear fraud scheme involving several fraudulent fire insurance claims in the Sacramento area that spanned from 2009 through 2013, often utilizing his legal skills in the process. Jamal Shehadeh separately pleaded guilty to arson and admitted to setting or causing to be set fires as a part of the fraud scheme. Among other things, Stone assisted Shehadeh with insurance claims after fires at 511 Broadway in June 2010, 5725 Marconi Avenue in September 2012, and at 2764 Fulton Avenue in June 2013.

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In late 2012, co-defendant Jamal Shehadeh had rented space at that location in the name of a supposed auto parts supply business. Stone 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 are prosecuting the case.

Two other defendants were charged in the case. Jamal Shehadeh pleaded guilty to two counts of arson to commit a felony on February 10, 2018, and was sentenced to 30 years in prison. Saber Shehadeh was convicted of three counts of mail fraud on June 4, 2018, after a seven-day jury trial, and is scheduled to be sentenced on October 18, 2018.

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