Crime - Sacto 911

Train hero Spencer Stone’s father, two others indicted in arson fraud scheme

Lawyer leaves courthouse after arson fraud indictments

John Manning, attorney for Brian Stone, leaves the Sacramento federal courthouse with Grace Stone, the wife of Brian Stone, on Friday, March 18, 2016. Jamal M. Shehadeh, Brian J. Stone and Saber A. Shehadeh were arraigned and charged in a 60-count
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John Manning, attorney for Brian Stone, leaves the Sacramento federal courthouse with Grace Stone, the wife of Brian Stone, on Friday, March 18, 2016. Jamal M. Shehadeh, Brian J. Stone and Saber A. Shehadeh were arraigned and charged in a 60-count

Three men, including the father of French train hero Spencer Stone, were indicted Friday on charges of collecting $1.5 million in insurance money in an arson fraud scheme that included setting fires at Sacramento-area commercial buildings.

The lead defendant named in the indictment, Sacramento businessman Jamal M. Shehadeh, was charged in 60 criminal counts including arson, mail and wire fraud and money laundering involving seven fires at six commercial buildings, including Tru Value Market in Sacramento.

In a scathing government motion to deny Jamal Shehadeh bail, federal prosecutors portrayed him as a “serial arsonist” who was also implicated in a 1996 murder for insurance money but never charged. In court papers, prosecutors said they also intended to introduce evidence that Shehadeh, 57, was involved in 13 additional fire or insurance claims not charged in the indictment.

Brian J. Stone, the father of Spencer Stone, allegedly provided business services including assisting with insurance claims after the seven fires in Sacramento and Carmichael between 2009 and 2013. Stone, 57, of Elk Grove was charged with 13 counts of mail or wire fraud.

Spencer Stone and friends Alek Skarlatos and Anthony Sadler drew international acclaim for thwarting a terrorist attack after they charged at and subdued a man armed with an AK-47, pistol and box cutter on an Amsterdam-to-Paris train Aug. 21.

Spencer Stone, an emergency medical technician at Travis Air Force Base, was promoted from airman first class to staff sergeant and awarded the Air Force Purple Heart and Airman’s Medal for his heroism after he brought down the gunman after having been slashed badly with the box cutter. He later recovered from life-threatening injuries in an October stabbing in midtown Sacramento.

Three men who grew up in Sacramento subdued a gunman on a high-speed train in France. Oak Park Pastor Tony Sadler relays his son's account of how the men disarmed the suspected terrorist.

Here is a shorter, clearer version of the video showing the Spencer Stone stabbing. Stone appears to be larger guy in white shirt.

In court Friday, defense attorney John Manning argued unsuccessfully that Brian Stone should be granted bail because “he was not any flight risk whatsoever.” Manning also noted that one of Stone’s sons served in law enforcement and another was “famous for his actions in France.”

Reached by phone Friday evening, Spencer Stone said he was unaware of his father’s charges and declined to comment on the case. He said he has not known what his father does “for a long time.”

U.S. Magistrate Judge Kendall J. Newman was unconvinced by Brian Stone’s defense argument. In denying bail, Newman also noted that Brian Stone was disbarred as a practicing attorney in California in 2001.

Also denied bail was Shehadeh and a relative, Saber A. Shehadeh, 73. Saber Shehadeh owned and operated Tru Value Market at 10th and E streets in downtown Sacramento and a nearby building that were destroyed in the fires.

In a bail denial motion, the government directed particular wrath at Jamal Shehadeh, calling him a “serial arsonist and insurance fraud who has evaded prosecution for decades while endangering members of the community.

“In this criminal endeavor, Shehadeh has been assisted by his reputation within the Sacramento Arabic-speaking community for arson and for killing potential prosecution witnesses,” wrote assistant U.S. attorneys Michael D. Anderson and Christopher Hales. “This reputation, unfortunately, is based in fact.”

The prosecution memo said Jamal Shehadeh was questioned by homicide detectives after the Oct. 8, 1996, shooting death of Tong Fang Huang, a woman killed by a single shot to the back of the head as she was working at a Stockton Boulevard convenience store.

The memo said Fang’s boyfriend was related to Jamal Shehadeh by marriage and that Shehadeh had arranged a meeting to secure a $250,000 life insurance policy payable to the boyfriend. Bank account statements for the policy were sent to Shehadeh’s address.

The government also raised questions about the death of Shehadeh’s wife, identified in court papers only as “D.S.” She died after a car rolled off a hill in the West Bank while they were on a honeymoon trip to Israel. Shehadeh filed an insurance claim to collect $100,000 on his wife’s life insurance policy; he was not charged by Israeli authorities.

Federal prosecutors noted that he has prior convictions for “grand theft, petty theft, more grand theft, selling liquor to a minor and drug paraphernalia.”

Arguing for denial of bail, they wrote: “There is no reason to believe Shehadeh will stop. He did not stop when investigated for murder and he did not stop when he learned the FBI was investigating him for arson. ... He is simply too great of a danger to be released under any circumstances.”

Defense attorney Benjamin Galloway said Jamal Shehadeh “emphatically denies the allegations.”

The case resulted from a joint effort by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation with assistance from the Sacramento Metropolitan Fire District and the Sacramento Fire Department. The arson and mail fraud charges carry potential federal penalties of 20 years in prison and a $250,000 fine.

The indictment alleged that Jamal Shehadeh and associates working with him purchased insurance policies for fire damage for the businesses they owned and controlled. In a statement announcing the indictment, prosecutors said false information was provided to insurance representatives to obtain coverage, and Jamal Shehadeh “then deliberately set fires or caused fires to be set.”

In addition to filing insurance claims, authorities said, the defendants used a company that Jamal Shehadeh controlled for the fire damage cleanup.

FBI agents took both Shehadehs into custody Wednesday morning. But when they went to arrest Brian Stone, they couldn’t find him, despite the fact that authorities had recently placed him under surveillance.

Once Stone knew FBI agents were trying to track him down, he turned himself in, prosecutor Anderson said.

Stone’s wife, Grace, was present in court as her husband, lightly balding with white hair and dark-rimmed glasses, faced charges. Spencer Stone wasn’t present.

After leaving the courtroom, defense attorney Manning refused to answer questions. Asked whether he had attempted to use Spencer Stone’s heroic actions to obtain leniency for his father, Manning waved his hands and responded, “Whatever the question is, the answer is ‘no.’ 

Alek Skarlatos, Spencer Stone and Anthony Sadler participated in a "Hometown Heroes" parade in their honor on Friday, Sept. 11, 2015, along Sacramento's Capital Mall. The parade honored the trio for thwarting an Aug. 21 terrorist attack on a train

Richard Chang: 916-321-1018, @RichardYChang

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