Arson case names RI lawmaker's firm

PROVIDENCE, R.I. (WPRI) - A Rhode Island state representative's business that the FBI raided last year is at the center of an arson and mail fraud case against a Warwick woman, the Target 12 Investigators have learned.

Louisa Knight, 43, of Warwick, has agreed to plead guilty to federal charges that she set her own home on fire in order to cash in on an insurance policy.

According to the criminal complaint and a plea agreement, Knight contracted with McCauley & L'Europa Public Insurance Adjusters in Providence on July 11, 2011, the same day as the fire damaged her home. In the plea agreement, prosecutors say Knight "caused said firm to file a fraudulent claim on her behalf with Allstate Insurance."

McCauley & L'Europa is owned and operated by state Rep. John J. McCauley Jr., D-Providence, and William L'Europa. Neither man has been charged in the case. McCauley, 54, is deputy speaker of the R.I. House of Representatives.

A spokesperson for Rhode Island U.S. Attorney Peter Neronha declined to comment in advance of Knight's change-of-plea hearing on Tuesday. She has agreed to plead guilty to one count of mail fraud and "use of fire to commit" mail fraud.

Each of the charges against Knight carries a maximum sentence of 20 years behind bars and a $250,000 fine, but prosecutors have agreed to recommend a lesser sentence as part of the deal. Prison time is a near-certainty for Knight, according to her attorney Paul DiMaio, who said the arson charge comes with a mandatory 10 years in prison.

The criminal complaint against Knight says her actions in the hours leading up to the fire raised a red flag for investigators.

"Louisa M. Knight enlisted the assistance of her minor daughter, and an unrelated minor female to arrange to have her domestic pets taken from the house prior to her lighting a fire," Assistant U.S. Attorney William Ferland wrote.

"Louisa M. Knight enlisted the assistance of an unindicted male coconspirator to remove certain personal property from the residence ... to prevent such property from sustaining damage from the fire she intended to light," he continued.

• Read the plea agreement and criminal complaint

According to an inspector's report provided by the Warwick Fire Department, Knight told investigators she was preparing to paint her home on the day of the fire and left at 11:30 a.m. to buy more brushes. A short time later, an alert neighbor spotted smoke pouring from the chimney and called 911.

According to the report, firefighters arrived on scene within two minutes and managed to extinguish the flames in the basement before they spread to the rest of the home.

A neighbor who asked not to be identified told Target 12 Knight appeared to be disappointed at the fire department's quick response.

"She said, 'AllI needed was 10 more minutes and the house would've been a goner,'" the neighbor told Target 12. "How sad is that?"

The report says several discarded cigarettes were found near the "area of origin" of the fire and there were "several chemical agents" found in the basement, but the exact cause of the fire was not determined.

• See photos from investigation

A little more than a month after the fire, Allstate Insurance issued two checks totaling $44,607.46 in the names of Knight and McCauley & L'Europa, according to the criminal complaint.

DiMaio tells Target 12 there is no indication McCauley's firm had anything to do with the arson and he believes federal agents learned of his client after sifting through files obtained in the FBI raid.

Federal agents executed a search warrant on McCauley & L'Europa's office at 247 Hawkins St. last November. At the time L'Europa told reporters he was aware the firm was under federal investigation.

McCauley, who did not return a call for comment, announced last week that he is not planning to run for reelection. He first won the House District 1 seat in November 1990, more than two decades ago.

Tim White ( twhite@wpri.com ) is the Target 12 investigative reporter for WPRI 12 and Fox Providence. Follow him on Twitter: @white_tim