Financial Fraud: Demetrios Stavrakis Indicted For An Arson Conspiracy In Order To Obtain Insurance Proceeds
Baltimore Business Owner Indicted on Federal Charges for a Conspiracy to Set Fire to His Business In Order to Obtain Insurance Proceeds
Baltimore, Maryland – A federal grand jury has indicted Demetrios Stavrakis, a/k/a Jimmy, age 53, of Lutherville-Timonium, Maryland, for an arson conspiracy to allegedly damage his business by setting it on fire in order to obtain insurance proceeds. The indictment was returned on March 28, 2019 and unsealed today. Stavrakis was arrested and had his initial appearance today in U.S. District Court in Baltimore. Chief U.S. Magistrate Judge Beth P. Gesner ordered Stavrakis to be released under the supervision of U.S. Pretrial Services pending trial.
The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Maryland State Fire Marshal Brian Geraci; and Commissioner Michael Harrison of the Baltimore Police Department.
The four-count indictment alleges that beginning in July 2015, Stavrakis engaged in a conspiracy to set fire to commercial property he owned in the 200 block of Haven Street in Baltimore, in order to collect insurance proceeds on the property. According to the indictment, on July 28, 2015, just before 6 p.m., Stavrakis used adhesive tape to defeat one of the security features on the front door of the building so that the person or persons setting the fire could enter the building.
According to the indictment, very early the next morning, someone disarmed the alarms inside the building by entering the four-digit codes for the alarms. Between 12:25 a.m. and 1:30 a.m., the office area of the warehouse was set on fire by using Methyl Ethyl Ketone, a flammable liquid used as a cleaning agent. The fire destroyed the office area and damaged a portion of the ceiling directly above the area. Later on July 29, 2015, Stavrakis contacted a public adjuster firm that his company had previously retained to notify them of the fire and to request their assistance in filing claims with the insurance company.
From July 29, 2015 through August 5, 2016, the adjusters, acting on behalf of Stavrakis and his companies, submitted false insurance claims totaling over $21 million. The insurance company paid a total of approximately $15,081,435. Of that amount, the indictment alleges that approximately $8,762,037 was used to purchase new machinery, purchase parts inventory, restore the building, and for other business expenses. In addition, insurance proceeds were allegedly transferred or used for other expenses, including, $600,000 which was transferred to an account in the name of Stavrakis’s wife, after which additional monthly payments of approximately $6,000 followed; approximately $98,499.20 used to purchase a 2016 Mercedes-Benz GL 550, titled and registered to Stavrakis; and approximately $25,500 used to purchase a 2016 Harley-Davidson Street Glide motorcycle.
If convicted, Stavrakis faces a mandatory minimum sentence of five years and a maximum of 20 years in prison for the arson conspiracy and for malicious destruction of property by fire; a mandatory 10 years in prison, consecutive to any other sentence imposed, for use of fire to commit a federal felony; and a maximum sentence of 20 years in prison for wire fraud.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Robert K. Hur commended the ATF, the Office of the Maryland State Fire Marshal, and the Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Judson T. Mihok, who is prosecuting the case.
