Steven Dugan, 26, whose great-grandfather founded the Isabella Fire Department in 1936, was found guilty of mail fraud related to two 2002 arsons that destroyed the department's century-old social hall and for aiding and abetting what federal prosecutors say was a scheme to collect insurance money.
According to prosecutors, Dugan was found guilty of not telling insurance investigators that Isabella firefighters could have started the blaze because he didn't want to ruin the department's chances of replacing the building with insurance money.
Tom Baker, former assistant fire chief, and Jerry E. Booker II, former vice president, both pleaded guilty last week to setting the fires that destroyed the social hall. Booker admitted to starting the fire, and Baker said that he told him to do it.
Following the trial, U.S. Attorney Mary Beth Buchanan said she expected a guilty verdict.
"I felt strongly that the charges were appropriate in light of the defendants," she said.
Dugan's attorney, Michael Farrell, said he was "disappointed" and "saddened" by the verdict.
In his closing statements, Farrell said that the prosecution needed the testimony of Edith Grow to prove "beyond a reasonable doubt" that Steve Dugan knew that Isabella firefighters started the blaze and lied about it to insurance investigators before Sept. 5, 2002, when an affidavit of loss was mailed to the insurance company.
Grow, of Brownsville, testified Tuesday that on two occasions, once at Baker's house and once at the home of his mother, Connie Baker, both James and Steven Dugan participated in conversations with Tom Baker, who said they should burn down the social hall.
Grow said Baker at one time said the fire hall should be burned because it was too small and another time said they should do it because fellow firefighters were giving James Dugan a hard time.
Grow also said she was with Baker at least 15 times when he started brush fires.
Steven's father, James Dugan II, former 30-year fire chief, testified, however, that he never participated or entertained such conversations.
"I would never do nothing like that," he said.
James Dugan went on to say that he was never at Connie Baker's house with his son while Grow was there.
Connie Baker also testified that James and Steven Dugan were never in her home at the same time and was not there on Easter 2001 as Grow testified. She also said that she never heard any conversation between the men about burning down the social hall.
Farrell also called witness to refute claims that Baker and Dugan said the social hall was too small and that Baker repeatedly said, with Dugan's knowledge, that the social hall was badly in need of repair and should be replaced.
Elizabeth Cole, the department's financial secretary, and Regina Booker, treasurer, both testified that the social hall could and did comfortably hold up to 500 people. It had been said a number of times during testimony that Isabella has 200 residents.
The two women also testified that the damage to the department was minor, including a damaged chimney in the bar area that had caused water damage to the wall and surrounding tile flooring.
Regina Booker testified that the department had more than $9,000 in one of three bank accounts and accepted a $5,000 bid for the needed repairs.
Farrell also argued that had Steven Dugan and Tom Baker talked about burning the social hall in 2001, they would not have had enough money to replace the building valued at $703,287 because they were underinsured at that time.
Bobbie Eicher of DuFurio Mongell and Associates, the insurance agent who handled the department's policy, said that Selective Insurance advised the department to increase its insurance coverage from $120,000 to $500,000 in late 2001 because the property was valued at $703,287. She said she contacted the department a number of times about the matter because the department did not want to increase the coverage.
Cole and Regina Booker, Jerry Booker's mother, both described the social hall as the town's main gathering place. They said the hall also served as the department's main source of funding.
But Assistant U.S. Attorney Shaun Sweeney told jurors that there are clearly two groups within the Isabella fire department the "older generation," who he said clearly loved the social hall, and the "young bucks," who had no emotional connection to the old building and wanted a newer one.
He reminded jurors that Grow was not the only witness to testify that Steven Dugan heard Tom Baker and others talk about how the department would be better off if the social hall burned down.
He reminded them of Dan Smith, a former Isabella firefighter, who said he himself told Steven Dugan of those conversations and had seen Dugan walk away in disgust when he heard such comments.
He also reminded jurors how Dugan waited almost 15 minutes after being alerted of the first fire before he called 911. Dugan, according to a transcribed interview, said he thought Baker and his sister, who told him of the fire, might have just seen steam coming from the building.
"That ladies and gentlemen is absurd," Sweeney said to the jurors. "This is the same man (Dugan) heard say he wanted to burn down the social hall. ...(Dugan thought) I better talk to Baker first, make sure we're on the same page."
Sweeney told the jurors that he does not believe and did not prove that Dugan took part in the initial scheme to destroy the social hall and that Dugan may not have known his fellow firefighters planned to do it. But he said that the prosecution proved that Dugan at the very least knew that they could have started the blaze and withheld that information to recoup insurance money to replace the hall.
"It's out of control in Isabella and Steve Dugan knows it. He chose to ignore it. He's turned a blind eye," Sweeney said. "...he wanted the insurance company to pay for the building and that's why he lied."
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