Second Person Prosecuted In Calif. Insurance Scandal

January 19, 2001

A federal grand jury returned an indictment Thursday, accusing a football coach who operated a camp for troubled children of mail fraud, conspiracy and obstruction of justice. It was the second such indictment in the scandal surrounding former California Insurance Commissioner Chuck Quackenbush.

Brian K. Thompson, 36, was accused by the grand jury of participating in a scheme to defraud the California Research and Assistance Fund, a charitable foundation created by Quackenbush with money he collected from insurance companies as settlements for their handling of claims from the 1994 Northridge earthquake.

On Tuesday, George Grays, a former deputy commissioner and political adviser to Quackenbush, was charged with conspiring with Thompson. Grays immediately pleaded guilty to two counts of mail fraud and one count of money laundering. Grays is expected to be the chief witness against Thompson in return for a recommendation of leniancy by prosecutors.

Thompson and Grays are alleged to have conspired to funnel money from CRAF to a non-profit organization operate by Thompson, the Skillz Athletic Foundation. Between July 1999 and January 2000, prosecutors said, Grays, who headed CRAF and had control of the checkbook, issued checks to the Skillz Foundation totaling $263,000. Thompson then allegedly used the money to pay Grays $170,900 in kickbacks. Thompson allegedly to cover his tracks by falsifying corporate records.

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