Outside the Courthouse, Camera in Hand

I just want to take a picture of him, something I've never been able to do during years of writing about his exploits. The only picture we have is that slick shot of him wearing sunglasses at an outdoor wine auction.

There are two exits at the courthouse. Photographer Elliott Johnson covers the Spring Street side with his arsenal of cameras, while after hearing the sentence, I race down to the Main Street side, get my point-and-shoot camera back from the entrance guards, and wait by a courthouse column.

When a friend of LeeAnne's from the courtroom–an older gentleman there for emotional support–sits down near me, I figure Carl is probably coming my way. I ready myself and the camera.

A few minutes later, the Hagmaiers emerge, walking straight toward me and the older man, who obscures my first shot. Carl sees me and turns away before I can get another good one.

He doesn't say anything to me, just as he hadn't said anything to me in the courthouse. He confers briefly with LeeAnne, then walks down the street.

I try to get out in front of him, but then he changes directions. I cut back, then he pivots back around, always keeping his back to me and the camera.

"Carl, if you just let me get one shot I'll leave you alone," I say.

No reply, but LeeAnne has a few words for me. She urges me to leave him alone, but I’m persistent. Then she gets mad: "I should take that camera and smash it." Next, she tries for sympathy: "How would you like to be harassed like that?" Finally, she just condemns me: "God rest your soul."

By the second block I’m tired of chasing Carl Hagmaier, both literally and metaphorically.

As the developed photos ultimately show, I shoot a series of photos of Carl Hagmaier's back and side, 22 in all, and only one shot that shows his face, the first one, obscured by another man's head.

I might have gotten a better shot if I had been more aggressive, but like I said, by the second block I was tired of chasing Carl Hagmaier. It was a thought that struck me hard, standing there on a Los Angeles sidewalk.

From the moment I met Carl Hagmaier, after having already investigated his crimes, I've been chasing him, trying to bring him to justice. He was a brazen and arrogant criminal who seemed for a long time to have fallen through the cracks in the system. And he was more.

He became a symbol to me of both the power and powerlessness of the press. Hagmaier was the first in a series of bad guys and organizations I've exposed, all of whom seem to survive the bad press and keep right on going in one form or another.

Hagmaier has now been punished, so I can stop chasing him. That was the thought that stopped me in the street. I snap a couple of more shots and watch the Hagmaiers disappear down an escalator.

Then I return to the courthouse steps to meet the Hagmaier victims for lunch and a chance to talk about the sentence, and the significance of our experiences with Carlton John Hagmaier.

Tuesday, 1:30 p.m.

At Lunch with Hagmaier Victims

There are lots of victims in this case. Moscovitch said Hagmaier was a victim of himself, while Carl earlier claimed to be a victim of developer Rob Rossi, investigator Alan Bond, his clients, Guardian Life Insurance, and New Times.

Guardian also feels victimized by Hagmaier, despite the fact that he made the company a ton of money while it ignored consumer complaints and other warning signs. The Guardian's Gordon Wylie, who was at the hearing, says the company had to reimburse clients for everything Hagmaier stole.

"We are the ultimate victim. We've spent almost $6 million on this, including attorneys’ fees," Wylie says. "I doubt we'll ever get any money back from Hagmaier."

Kokkonen gets mad that Guardian would claim to be a victim, saying that's a slap in the face to all of the people who had their assets or livelihoods stolen by Carl Hagmaier.

The real victims are people like elderly Marion Mitchell, who had her life savings pilfered; Joseph DiFronzo, the owner of Giuseppe's Italian Restaurant, where Hagmaier was a regular, who had his employee benefit plan raided; and dentist Sol Altman, who also had his employee pension plan snatched by Hagmaier.

The list goes on and on, at least 16 people long, probably more, considering Guardian quietly paid off many victims and had them sign confidentiality agreements to keep their stories secret. But the stories that did get out are enough to understand Hagmaier's predatory nature.

There was Hagmaier's most brazen caper, taking $539,000 in checks from PIC Manufacturing of Paso Robles to set up an employee pension fund and simply pocketing the money.

PIC owners Michael and Dennis Camp, father and son, came to Los Angeles to see Hagmaier punished, as did Cynthia Graves, one of Hagmaier's last victims, and Matt Kokkonen, arguably his first.

"I want to see Hagmaier pay the price for everything he has done," Dennis says.

"I just want to see his reaction," Graves says.

After the hearing, over lunch, these four victims and I, the journalist, sit down to make some sense of the experience and talk about whether justice had been done.

"Evidently, he never thought there would come a day of reckoning," Michael Camp says.

Cynthia Graves had already given Hagmaier $60,000 when she read my article, "The Rise and Fall of Carlton J. Hagmaier." She questioned him about it, received his reassurances, and hoped my story was wrong and that everything would be OK.

"It was denial," Graves now says.

While Hagmaier's victims feel a sense of closure and believe the system, although slow, ultimately worked for them, they are still restless. They still express a hope that Hagmaier might still be punished more.

All four agree that the San Luis Obispo County District Attorney's Office should pick up where the U.S. Attorney's Office left off, investigating and indicting Hagmaier for more of his crimes.

"Our district attorney should be looking at these things and moving," says Dennis Camp. "The DA would gain a lot of credibility by acting on it."

In addition to charging more of his financial crimes, they would like to see Hagmaier indicted for perjury based on the conflicting statements Hagmaier has made under oath over the last few years.

"Oh yeah, the door is wide open for our local DA," Michael Camp says.

The victims heard Hagmaier apologize to them in court, but they don't feel any better about him, or feel like his apology was genuine. Perhaps that's what comes from having been directly lied to so many times by Hagmaier.

"He's extremely sorry, sorry he got caught," Michael Camp says.

"He's sorry he doesn't have his nice car anymore," Graves adds.

Kokkonen smiles and lets the fortune cookie he opens do the talking: "Listen not to vain words of empty tongue."

But there is little consensus on what created Carl and whether he is some aberration to be dismissed, or whether he is a symptom of a larger problem.

How much is Carl Hagmaier a product of the capitalist system? How much was he created by a system that rewards trying to squeeze as much money as possible out of clients?

Michael Camp believes Hagmaier is a byproduct of our economic system, the perfect poster child for the excesses and failings of capitalism in general and the insurance industry in particular.

"We've all known a plethora of people like Hagmaier; most of them just never go that far," Michael Camp says.

But Kokkonen the insurance agent has problems with that analysis and says only Hagmaier is to blame for his crimes. Not the system, nor the profit motive, nor even Guardian. Yet he understands Camp's take on the situation and understands that is one of Hagmaier's legacies.

"It paints a very bad picture of our industry, and business as a whole. And that is damaging to society," Kokkonen says.

Hagmaier has damaged the trust of those who knew him, but his victims are trying to get past that, trying to stop chasing Carl Hagmaier.

"Revenge leaves a bitter taste. You might as well forget about revenge. It's gone through the courts. If they were right, they were right," Michael Camp says. "And if they were wrong, they were wrong."

Epilogue

It's important to keep Hagmaier and his deeds in perspective. While his was a unique case for San Luis Obispo County, the National Association of Securities Dealers every month takes action against dozen of agents who have committed similar crimes across the country, usually months or years after the crimes.

Late last year, NASD tried to deal with the problem by requiring all offices that deal in securities to designate someone other than registered agents to review all incoming mail, trying to prevent the deeds of rogue agents like Hagmaier.

The new rule requires firms to review incoming, written correspondence "to identify customer complaints and funds and to ensure they are properly handled," according to an NASD notice to members.

In California, the Department of Insurance has come under fire for its failure to effectively regulate insurance companies and agents, even though they are quick to act against individuals who make fraudulent claims against insurance companies.

An exhaustive investigation by the San Francisco Chronicle last fall found that under then-Insurance Commissioner Chuck Quackenbush, who was elected mostly with insurance industry contributions, agent license revocations dropped even as complaints of serious misconduct rose; the division that investigates complaints was slashed, creating a 6,000-case backlog; and even egregious cases of misconduct resulted in only small fines.

"Rogue insurance agents are swindling thousands of California policyholders out of millions of dollars, and state Insurance Commissioner Chuck Quackenbush, the elected industry watchdog, is dropping the ball," began a Chronicle editorial related to the series.

That investigation, and the countless others done on what seems to be a growing problem, prompted the state Senate Committee on Insurance to last month hold special hearings on the problem.

"As a result of the hearings, it is still clear that the Department of Insurance is not expeditiously investigating and prosecuting agent and broker abuse," said Jeff Whitfield, staff director of the committee and a former lawyer from the Department of Insurance.

It is in such a laissez faire regulatory climate that people like Carl Hagmaier brazenly steal money from clients over a period of six years, only to be caught once truly going over the top, their ill-gotten gains totaling a few million dollars.

So now, Hagmaier goes to federal prison, probably just down the road in Lompoc. And in four years, when he's 40 years old, he'll be free, free to do whatever he wants, except work as an insurance agent.

"There is little doubt that he will not practice in the financial planning arena again," Moscovitch told the judge.

What then, with all his charm and treachery, will Carl Hagmaier do next?

Staff writer Steven T. Jones is on to other stories.