A Lutherville-Timonium resident was convicted by a federal jury Monday for conspiring to defraud insurers of more than $15 million by setting fire to his Baltimore-based business in 2015, the Maryland U.S. Attorney’s Office announced.
During his trial in U.S. District Court in Baltimore in 2015, prosecutors provided evidence that Demetrios “Jimmy” Stavrakis, president of Adcor Industries, conspired to set fire to his military weapons manufacturing company on South Haven Street, according to a press release Tuesday.
The property also housed Adcor Beverage and other businesses owned by Stavrakis.
According to the U.S. Attorney’s Office, trial evidence showed that on July 28, 2015, Stavrakis used tape to obscure one of the security features on the building’s front door, and that security alarms inside the building were disabled so that one or more people could enter the building and set the fire.
A U.S. Attorney’s Office representative could not immediately confirm if others had been arrested or charged for conspiring in the incident.
The subsequent fire destroyed an office on one floor of the building and was reported by a pedestrian who observed the smoke before the Baltimore Fire Department extinguished the blaze, the release stated.
An insurance company paid Stavrakis and his companies more than $15 million toward submitted claims totaling more than $21 million, the U.S. Attorney’s Office said.
The insurance proceeds were used to buy new machinery and inventory and were put toward other expenses, including a transfer of $600,000, then monthly payments of $6,000, to an account in the name of Stavrakis’ wife, according to the release.
Almost $98,500 was used to buy a 2016 Mercedes-Benz GL 550 titled and registered to Stavrakis, and a BMW was purchased for nearly $53,000, registered to Stavrakis’ wife, the U.S. Attorney Office said.
According to the release, insurance money also was used to buy a motorcycle, watches and jewelry.
Testimony during the trial showed Adcor’s business had taken a downturn by 2010, after the loss of a contract with Colt Industries, and that from 2011 to 2015, Stavrakis’ companies defaulted on several loans. Also, profitable divisions were sold off in order to compensate, according to the U.S. Attorney’s Office.
Stavrakis’ struggles to pay suppliers produced legal action against the business owner, and in December 2014, Stavrakis was advised by an accounting firm that he had inadequate funds to carry business operations through December 2015 and was on pace to lose $2.9 million in that same time, the U.S. Attorney’s Office said.
Stavrakis faces at least 15 years in federal prison for malicious destruction of property by fire, using fire to commit a federal felony and two counts of wire fraud, according to the release.
Stavrakis plans to appeal the conviction, his attorney Steven Levin said.
“This case is far from over,” Levin said. “He is innocent.”
Latest Baltimore County
A sentencing hearing is scheduled for Jan. 4.