Jason Sheedy Insurance Fraud Case

St. Paul man falsely reports stolen art, gets three years’ probation

November 5, 2015

Jason Sheedy was in a bind. His consulting firm was in bad shape and debt collectors were at his door.

The St. Paul man owned a fortune in art, though. He could sell it off and dig out of his financial hole. He’d never walked away from a debt before.

Instead of selling the art, though, he cooked up a scheme to claim it had been stolen and then collect the insurance money. And on Monday, Jan. 14, a federal judge told him he would have to spend three years on probation for his crime and pay more than $325,500 in restitution.

Sheedy, 39, could have faced more than two years in prison. But in sentencing him, U.S. District Judge Susan Richard Nelson of St. Paul said his was “a bit of an unusual case” that didn’t fit tidily within the federal sentencing guidelines for his offense, wire fraud.

The judge noted that despite a troubled upbringing in a dysfunctional family, Sheedy had long devoted himself to working in the community, with a resume chock-a-block with good deeds and noble pursuits locally and nationally. While doing all this, he earned a doctorate in business administration.

“Your dedication to your community has been extraordinary,” said Nelson, who said she’d gotten 40 letters of support from the man’s colleagues, friends, family and others.

“I don’t see an evil side of you,” she told him.

Still, his crime was serious and his scheme elaborate, and he kept up the lie for years — a “one-time terrible judgment on your part,” the jurist said.

Sheedy, who spoke before sentencing in a clear and strong voice, told Nelson that he was sorry and that while his attorney had made reference to his difficult circumstances growing up, “I would never hold that out as an excuse.

“All I can do is say I’m sorry and try to make it right in the future,” Sheedy said.

Sheedy had worked as a self-employed management consultant. His employment and volunteering history included work as an emergency medical technician, volunteering with Habitat for Humanity and the Human Rights Campaign and working with disabled adults. He did work for the Carter Center, the organization set up by former President Jimmy Carter.

But his consulting business has been hurt by the real estate bust, and by 2007, he was in debt. Federal prosecutors say that distress spawned Sheedy’s illegal scheme.

In September 2007, he called Minneapolis police to report that some valuable artwork had been stolen from a van while he was moving..

The following September, Sheedy filed a claim with AXA Art Insurance Corp. for $274,905. The insurer thought he had overvalued his art, and in January 2008, sent him a check for $254,832.

He had also filed a claim with Farmer’s Insurance Co., which paid out $93,302.

The art never left his home, though. As the FBI would later discover, he pawned some of it for short-term loans, and on May 24, 2011, he listed six of the stolen paintings for sale on an art brokerage website.

Art-theft registries routinely scour such websites for stolen art, and it proved Sheedy’s undoing. Attorney Christopher A. Marinello, acting on behalf of AXA Art, noticed the sales and discovered that the seller’s name matched the insured “theft victim”. Marinello reported this discovery to the police and filed a separate report with insurance fraud investigators in Minnesota.

The missing works included “Robbers Inferno,” a 24-inch wood engraving from Spanish surrealist Salvador Dali’s “Divine Comedy” portfolio; eight works by Rembrandt: “Bust of a Man,” “Christ and the Woman,” “Landscape With Cow,” “Self-Portrait,” “Artist’s Mother,” “The Card Player,” “The Golf Player” and “The Raising of Lazarus”; two works by Russian-born French artist and designer Erte (Romain de Tirtoff); two by Ukrainian-American artist Anatole Krasnyansky and two by American pop artist Peter Max.In December 2011, investigators searched Sheedy’s home and found all but one of the items he’d reported stolen four years before.

He was charged with wire fraud in August and pleaded guilty less than two weeks later.

Federal sentencing guidelines called for a prison sentence of 21 to 27 months. In a pre-sentencing memorandum to the judge, Assistant U.S. Attorney Ben Langer said a minimum sentence was appropriate, “given the defendant’s lack of criminal history, his quick acceptance of responsibility and his genuine remorse.”

Andrew Mohring, a federal public defender who represented Sheedy, listed the man’s good deeds and community service and told the judge that “community involvement is more than something he does: it is a reflection of who he is.”

Addressing the court, Mohring told Nelson that while the crime was serious, Sheedy “is entirely the author of that injury” and that there was better punishment than incarceration.

Nelson agreed. She told Sheedy he would get probation, but that he had to make restitution to the insurance companies.

She also said he had to perform 500 hours of community service over the three years.

“I will be disappointed if you’re back here again,” she told him.