NEWPORT BEACH — Newport-Mesa Unified School District will recoup $150,000 from its insurance carrier against the embezzlement of $3.9 million by its former chief fiscal officer, Stephen A. Wagner, district officials said Monday.
Half of that money, to be paid by the Chubb Group of Insurance Cos., is expected to go toward paying auditors who have been trying to unravel the complex trail of embezzlement dating back to at least January, 1986, said Thomas C. Godley, the district's assistant superintendent for budget, facilities and personnel.
"This investigation has taken hundreds and hundreds of hours of staff time--of my time and our people in accounting--to get the records, to help the auditors get what they need," Godley said. "It will probably take all of that $75,000 for the audit."
Godley said the other half will probably be eaten up by mounting legal fees as attorneys for Newport-Mesa Unified try on several fronts to recover money stolen by Wagner, who is scheduled to be sentenced April 2 in Orange County Superior Court.
The school district also has a claim pending for the maximum of $250,000 with its previous carrier of fidelity and liability insurance, the Alliance of Schools for Cooperative Insurance Programs. The consortium was the district's insurance carrier through June 30, 1992.
Meanwhile, a gemologist has determined that Wagner grossly overstated the value of 72 gems he claimed were worth more than $3 million, according to bankruptcy trustee Theodor Albert.
Albert declined Monday to discuss the true value of those gems, including a "doorknob-sized," 861.5-carat blue topaz that Wagner said was worth more than $650,000.
"They do have a value--it's not like they're glass," Albert said of the gems, which are in the possession of a Toronto gem broker. "But they don't have nearly the value that Wagner ascribed to them. . . . I don't know whether Wagner himself was scammed or whether this was some sort of elaborate ruse to throw us off the scent."
Wagner, who with his wife filed for bankruptcy last July, faces $2.4 million in Internal Revenue Service liens for unpaid taxes. The school district has also filed a claim to recover the money Wagner admits he embezzled.
At this point, Albert said, he has liquidated two of Wagner's real estate holdings, a house in Fullerton and a condominium in Rancho Mirage. Linda and Stephen Wagner's wedding bands have been valued at several thousand dollars each. Altogether, Albert estimated, the couple's estate may be worth $200,000 to $500,000.
But Albert is continuing his search for hidden assets that could boost the final total. "I'm still a long way from throwing in the towel," he said.
In the meantime, the bankruptcy trustee is planning an auction of Wagner valuables in April. It will be held at Wagner's former home on Galaxy Drive, in the exclusive Dover Shores area of Newport Beach.
"It will be a plain, old-fashioned auction," said Albert. "I read with some amusement where someone had paid a lot of money for the beeper of Amy Fisher. I'm rather hoping the people in the business of acquiring possessions of the notorious will be interested in this."