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State Farm Tried to Nail Its Customers for Arson, but the Bad Guys Were Firefighters

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On December 29, Detective Dougherty met with Brewster in Peoria. Brewster provided Dougherty with one of the "bank" letters that he said Betty Johnson had given him more than a year earlier.

Brewster said the letters gave the impression that the Johnsons had a construction loan, but BankOne officials told him that no such loan existed.

"Brewster said that the Johnsons basically put him out of business, and he no longer had the concrete company," the detective wrote.

A BankOne official later told Dougherty that there was no loan officer named Lillian. She told the detective that the Johnsons did not have a construction loan or line of credit with the bank.

Still, the official said, the bank didn't consider itself a victim of a fraud.

Within days, State Farm hired private fire investigator Joe Sesniak to explore the likely cause and origin of the blaze.

An internal State Farm "activity log" dated December 29 noted that Sesniak reported to the Special Investigations Unit that he had "learned from the [sheriff's] investigator that [Betty Johnson] is a possible suspect in the [fire] due to her involvement in a prior fraudulent case."

That was an apparent reference to the murky BankOne letters.

Certainly, the spotlight was squarely on the Johnsons. It would not be the first time that financially strapped homeowners, if that's what the Johnsons were, had taken that turn.

And if Betty Johnson had gone to the extreme of inventing a phony bank loan to avoid paying the workers, didn't that suggest a desperate situation?


On December 30, 2003, private fire investigator Sesniak met a team from the Sheriff's Office that included Detective Jim McCarthy at the burned-down house.

As is often the case in arson investigations, police and insurance company personnel worked closely.

Also there were members of a construction firm that specializes in debris removal, and a sheriff's fire-accelerant-sniffing dog, Maxie.

The ashes and rubble went about six feet deep in parts of the basement. It took more than a day to sort through the mess, and then for a crane operator to lift out the debris and place it down carefully in the yard.

The investigators hosed down the cleaned-out basement floor and quickly identified irregular fire patterns indicative of ignitable liquids having been dumped on it.

Maxie alerted his handler, Detective McCarthy, to 23 locations where gasoline had been poured.

As originally suspected, this was arson.

In a 2009 deposition, McCarthy said he and Sesniak found scant signs of any personal property, charred or not, inside the structure, except for some paint cans, a generator in the garage, and a few other items.

Insurance companies usually start working on claims within days after something happens. Someone interviews the insured and inspects any property damage, in a preliminary effort to assess potential liability.

But State Farm did not speak to the Johnsons for almost three months after the fire, an unusually long gap after such a major loss.

The Johnsons' policy covered both structural damage and items inside the home. The structure was totaled. But the issue of what personal things had been in it when it burned would erupt into a war between State Farm and the couple.

On January 6, 2004, State Farm sent the Johnsons a "reservation of rights" letter, putting them on notice that it wouldn't cover certain losses, for example, if it turned out the Johnsons had been the arsonists.

The next day, State Farm special investigator Melissa Bishop heard from Patrick Bolley, the Phoenix firefighter who had gotten crossways with the Johnsons. A transcript of that phone call shows the effort Bolley made to paint the Johnsons as bad guys.

Bolley went on and on about the BankOne letters, saying Robert Brewster's concrete company "wound up going bankrupt because he didn't receive payment from [Betty Johnson]."

Bolley said Brewster and other subcontractors had given him copies of the letters "because they were pretty upset."

Apparently referring to the BankOne letters, Bolley told the investigator, "I guess my gut feeling is, I just don't like to see people get away with doing evil things to people."

Bolley later faxed over copies of some of the letters on official Phoenix Fire stationery.

A few days later, Bolley's neighbor and fellow Phoenix firefighter Kent Arnold called State Farm to repeat his damning story about Mike Johnson's supposedly toting several gas cans into the residence.

Robert Brewster himself contacted State Farm in early February 2004, explaining to investigator Bishop that the Johnsons owed him money. He was wondering whether State Farm could cover the debt.

Bishop told him that the company could not help him. Brewster mentioned the BankOne letters and offered to give an official statement, but State Farm never took him up on it.


The Johnsons had hired a public adjustor to advocate for them (for a percentage of the proceeds) during the insurance-claims process.

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Paul Rubin
Contact: Paul Rubin