Defendant Found Guilty in Quackenbush Insurance Scandal

A former aide to Chuck Quackenbush, the California insurance commissioner who resigned in scandal in 2000, was convicted Friday on all charges alleging his participation in the illegal transfer of insurance settlement money to a nonprofit group.

Federal jurors took just 30 minutes to convict Brian “B.T” Thompson of two counts of mail fraud and one of conspiracy to launder money. The charges carry a maximum penalty of 30 years in prison, with sentencing set for May 27.

Thompson was immediately taken into custody. This is the 38-year-old Thompson’s second trial on charges he helped siphon off $263,000 between July 1999 and January 2000. He had been convicted of obstructing justice in September by a different jury that deadlocked on the fraud and conspiracy charges, triggering the retrial.

Quackenbush has not been charged with any crime.

Testifying in his own defense Thursday, Thompson made the first public claim that Quackenbush knew about the payments. Thompson testified that Quackenbush authorized the shifting of insurance settlement money between Thompson and Deputy Insurance Commissioner George Grays.

He told jurors he discussed the arrangement with Grays and Quackenbush, contradicting their earlier testimony. During cross-examination, Thompson acknowledged he lied in the past about his dealings with Grays.

Grays testified this week that he and Thompson stole $263,000 of the claims settlement funds though phony “grants” to Thompson’s youth football program and kickbacks to Grays.

Thompson said he met with Grays and the insurance commissioner in July 1999 and “Quackenbush confirmed the proposal.”

Grays has pleaded guilty and is cooperating with the government in return for a reduced sentence.

Quackenbush testified this week that he didn’t know about the payments until the spring of 2000, when he asked his chief deputy, Michael Kelley, “to see where all the money had gone,” The Sacramento Bee reported.

According to Thompson, Grays proposed that Thompson make his Skillz Athletics Foundation a nonprofit group, which would allow it to accept money from the California Research and Assistance Fund.

CRAF was a nonprofit created to collect millions of dollars in settlements Quackenbush made with insurance companies that had mishandled 1994 Northridge earthquake claims.

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