BY STEVEN T. JONES

Carlton J. Hagmaier was a San Luis Obispo success story. Several years before he reached his current age of 33, Hagmaier was a millionaire, well-known around town and his country club for being a big spender.

He drove expensive cars, lived in an expensive house, bought expensive furniture and jewelry, wore expensive suits, drank expensive wine, and ate expensive food.

At both Cafe Roma and Giuseppe's Italian Restaurant, two among his favorite pricey haunts, Hagmaier would sometimes drop a few thousand dollars a month wooing clients and friends. Hagmaier was also a regular at major wine auctions here and in Napa Valley, shelling out big bucks for the best wines.

After work, he would socialize with SLO's elite, including prominent developer Rob Rossi, whom Hagmaier considered his "best friend." With Rossi, Hagmaier got involved in commercial real estate, building his $2.5 million office building at 444 Higuera and becoming a partner in the sprawling Promontory office building down the street.

True, he was only an insurance agent, working as this area's general agent for Guardian Life Insurance Co. But he also sold and administered the company's lucrative pension plans, and he parlayed his nearly $500,000 annual salary into a personal fortune.

But, perhaps, there is another side to Carl Hagmaier.

Some of Hagmaier's clients say he financed his expensive tastes and social climb by stealing their money. They accuse him of forging a multitude of documents, depositing clients’ pension funds in his own account, using financial sleight-of-hand to raid the equity from life insurance policies, and stealing money that was intended for his clients.

Among Hagmaier's accusers is Rossi, who says his former friend betrayed his trust to steal from his family members' trust funds and skip out on a loan. Rossi brings Hagmaier’s name into the most serious of the financial misdeeds of which he stands accused: taking PIC Manufacturing’s $600,000 employee pension fund.

In addition to financial ruin and a half dozen civil lawsuits, Hagmaier could also face criminal charges. His alleged misdeeds are currently being investigated by both the FBI and California Department of Insurance.

Yet Hagmaier remains resolute.

"I didn't do anything wrong," he maintains.

On its surface, the Hagmaier saga is a confusing array of lawsuits, complex financial information, legal mumbo-jumbo, and he said/she said accusations. But a deeper and more thorough examination reveals a compelling human drama of greed, betrayal, desperation, and hunger for the good life.

The Rise

Carl Hagmaier graduated from Cal Poly in 1983 with a degree in computer science. He would brag to some people that he had transferred here from Stanford University after losing a basketball scholarship to a knee injury. But Stanford officials say Hagmaier never went there.

After Cal Poly, Hagmaier decided to take a job selling Guardian Life Insurance policies for Matt Kokkonen’s National Monetary Resources agency, a career path also chosen by Dennis d’Autremont and Michael Ables.

The three hot young salesmen would take over the agency and its Guardian contract in 1989, when the insurance giant dumped Kokkonen. Guardian’s contracts with its general agents can be severed without cause by either party.

Hagmaier’s new Pacific Financial Group took over many of Kokkonen’s clients and, Kokkonen says, began bad-mouthing their former boss in order to take even more clients.

Kokkonen responded by suing Guardian, Hagmaier, and the others, charging libel, slander, and unfair business practices. Although a settlement to those charges was reached in 1992–the terms of which are secret–Kokkonen and Guardian are still battling in the courts over client information and records.

The case reached the U.S. Supreme Court in 1994, when the high court ruled in favor of Kokkonen, returning the matter to a lower court. It is now set for trial later this year.

Despite the Kokkonen lawsuit, things were going pretty well for Hagmaier, who became a darling for Guardian, bringing in a ton of money and earning high commissions in the process.

Hagmaier and his wife, LeeAnne–who works as a planner for RRM Design Group and sits on the board of directors for the San Luis Obispo Chamber of Commerce–moved into a $700,000 house on the golf course at the San Luis Obispo Country Club.

Hagmaier cultivated a reputation around town as a big spender, showing up at all the high-profile local events and restaurants in his trademark expensive suits and slicked-back hair. He drives a $40,000 Cadillac; LeeAnne sports a $60,000 Jaguar.

Hagmaier used the Navaho airplane that he co-owned with developer Richard Loughead to fly in Guardian officials and guest speakers for the San Luis Obispo Association of Life Underwriters meetings–all at his own expense.

Co-workers say he would regularly flaunt his growing wealth with statements to secretaries like, "Well, I’m off to the bank to deposit this $60,000 check into my account."

Hagmaier was always the controlling interest in Pacific Financial Group, and he became its sole owner and this area’s sole general agent for Guardian in 1991, when d’Autremont pulled back his involvement to be an independent agent. (New Times has purchased life insurance policies through Guardian with d’Autremont.)

While his public façade shimmered, Hagmaier was privately creating for himself a legal and financial mess that would eventually catch up with him.

Evidence of Wrongdoing

Court records contain several documents and assertions that seem to indicate financial mismanagement and potential criminal wrongdoing by Hagmaier.

At the center of most of the accusations are alleged forgeries committed by Hagmaier that led to hundreds of thousands of dollars going into his bank account.

Signatures were allegedly forged, changing policies and giving Hagmaier higher commissions. Signatures were allegedly forged in taking out loans and receiving dividends against the equity of Hagmaier’s clients’ life insurance plans, with those monies deposited in his bank account. And signatures were allegedly forged endorsing Hagmaier’s clients’ checks for deposit into his account.

In most cases, Hagmaier is accused of having benefited directly from the alleged forgeries. In some cases, the documents show Hagmaier signed off as the witness to the signature, which further indicated he was involved in taking money from his clients.

The two most serious lawsuits against Hagmaier are from PIC Manufacturing, a Paso Robles firm that makes a specialized printing part, and from PIC’s owner, Michael Camp.

In December of 1989, Camp paid Hagmaier $200,000 for two single-pay life insurance policies. They were to cover his wife and daughter, and were intended to be long-term investments.

According to the lawsuit, Hagmaier then took that money, bought two policies of lesser value for Camp, and pocketed the rest of the money. To cover his tracks, they say Hagmaier forged documents to have all Guardian correspondence sent to him, rather than to Camp.

In 1992, documents allegedly forged with Michael Camp’s signature took out a $60,000 loan against the insurance policies. Hagmaier signed off as a witness on those documents. The check was then endorsed over to Hagmaier’s account–with another allegedly forged signature–and deposited.

The alleged improprieties were discovered by the Camps last year when Guardian inexplicably sent a statement requesting payment on the loan to a little-used post office box of Camp’s daughter, Beckie.

"My hunch is there was somebody in Guardian who was trying to let us know," said Dennis Camp, Michael’s son and PIC’s general manager.

During Michael Camp’s dealings with Hagmaier over the life insurance policies, he also decided to set up an employee pension fund, which he also did through Hagmaier and Pacific Financial Group.

Over the next five years, PIC Manufacturing contributed nearly $600,000 to the fund, all of it in the form of checks made out to Pacific Financial Group. What they didn’t know was they were going into the same general fund that Hagmaier used as his own.

And once again, the Camps say Hagmaier arranged to have all correspondence between Guardian and PIC go through him. They say he went so far as to create fake PIC Manufacturing letterhead listing the company’s address as 414 Higuera St., Suite A–which was the Pacific Financial Group address at the time.

After being tipped off to Hagmaier by the Guardian correspondence, the Camps looked into how their pension funds were being administered and received only confusing and evasive answers from Hagmaier. The lawsuits followed.

Early this year, a federal judge ordered Hagmaier to give a deposition about the PIC fund. He did so on April 29 in Los Angeles, against the advice of his attorney, James McKanna, who advised him to exercise his Fifth Amendment right against self-incrimination.

That deposition, with its insights and apparent contradictions, could prove to be the key to Hagmaier’s undoing.

"PIC gave us free rein to decide where to put the moneys–gave me free rein," Hagmaier said. That statement contradicts written instructions from PIC stating, "Securities and investments are to be limited to life insurance contracts, treasury bills, notes, bonds, certificates of deposit, and money market funds offered through and guaranteed by Guardian Life Insurance Company."

So what does Hagmaier say he did with the money?

"There are two main investments in the plan. One is a series of loans to an individual, Rob Rossi, another is a loan to–a couple loans to–Henry Byzinski," Hagmaier stated.

In answering questions, Hagmaier went on to say that both the $250,000 "loan" to Rossi and the $175,000 "loan" to Byzinski were undocumented and included no promissory notes. The terms were supposedly 8 percent interest and a 90-day call and he said nothing had been repaid.

Byzinski could not be reached for comment, but Rossi said Hagmaier is lying.

"I totally deny that he, or he through the PIC pension funds, loaned me any money. It is an untruth and it is ridiculous," Rossi said, adding that the statement "is just outright slanderous."

The Rossi Connection

Rob Rossi met LeeAnne Hagmaier in the mid-1980s, when she was the planner on a development project Rossi was involved with. They became friends, and by 1990, Rossi also forged a friendship with Carl Hagmaier.

"We’ve certainly been friends," Rossi said of Carl.

"We were best friends, probably," was how Hagmaier put it in the deposition.

In 1992, Hagmaier and Rossi also became business associates. They went in as 50-50 partners to build the 444 Higuera building where the Pacific Financial Group resides.

And on Jan. 31, 1992, the Hagmaiers signed an agreement to buy a 12.5 percent interest in Rossi’s Promontory office building for $100,000 up front and $250,000 plus 10 percent interest to be paid in four installments over the next year.

That’s right, $250,000, the same amount Hagmaier claims to have "loaned" Rossi from the PIC pension plan, and over the same time period. Hagmaier last week told New Times that the $250,000 "loan" was on top of the $250,000 he was repaying.

"Rob Rossi’s loan was fully satisfied and the loans from PIC were in addition to that," Hagmaier said, a claim that Rossi firmly denies.

Hagmaier produced $484,375 worth of canceled checks to Rossi, saying that proved his story. But also at this time, Hagmaier was paying Rossi for their partnership in 444 Higuera, a fact that would also explain many of the checks.

Rossi’s records show he did borrow money from Hagmaier on four occasions–$40,000 twice and about $25,000 twice. But he also has checks showing three loans were repaid within one week, and one $25,000 loan was repaid within three months.

Hagmaier’s claim of giving Rossi a long-term $250,000 loan comes despite the fact that court documents show that he had trouble paying Rossi the $250,000 for the Promontory. In fact, earlier this year, Rossi sued the Hagmaiers for the $95,313 still owed on the debt.

Rossi said Hagmaier’s story is a desperate act by a desperate man.

"It is like anyone trying to hide a trail. They throw a lot of dust in the air," Rossi said.

Canceled checks and financial claims aside, Rossi said the claim by Hagmaier that he loaned out $250,000–as well as another $175,000–of PIC’s money without any loan documentation, at the very least, shows gross mismanagement of funds.

"I don’t know of any instance when a pension plan lent money to anyone without notes," Rossi said.

Yet hearing about the PIC Manufacturing "loans" was not how Rossi came to see his former friend as someone playing fast and loose with clients’ money. No, Rossi already had firsthand experience with Hagmaier’s alleged forgery and thievery.

Another Rossi vs. Hagmaier lawsuit filed earlier this year charges Hagmaier with forging several signatures in connection with life insurance policies taken out with Hagmaier in 1992. The policies were for two Rossi family trust funds.

In addition to the higher commissions from changing the policies, the Rossi suit also said Hagmaier in 1994 intercepted about $16,000 worth of dividend checks intended for trustee Stephen Rossi. The suit accuses Hagmaier of then forging Rossi’s signature and depositing the money into his own account.

When the Rossis discovered what happened and confronted Hagmaier with the forgeries last year, Hagmaier, in a letter, blamed a former Pacific Financial Group secretary who had left the area.

Yet that employee, who spoke to New Times from Texas on condition that her name not be used, said Hagmaier lied.

"I wasn’t even working there during that time," said the woman, who was on maternity leave between March and October 1992. At least two of the alleged forgeries occurred during that time period.

Furthermore, she said that if she had committed the forgeries, one would think she’d have benefited in some way. Instead, she said, she’s living in poverty and the money went into Hagmaier’s account.

So where is the PIC pension fund, if indeed the loan to Rossi was a lie?

Hagmaier won’t answer that question now, citing the pending litigation. But Dennis Camp thinks he knows the answer.

"There is nothing, zero, absolutely not a dollar," Camp said. "He spent it."

The Fall

Everything started to fall apart for Carl Hagmaier this year.

The lawsuits came one right after another. In addition to the Rossi, PIC, and Camp suits, ValliWide Bank sued the Hagmaiers for defaulting last year on a $50,000 loan that had been rolled over from the 444 Higuera St. project in 1993. They hadn’t made a single payment since ValliWide assumed the loan.

It was the ValliWide suit that must have made the reality of the Hagmaiers’ financial problems finally hit home.

In May, acting on a ruling from Judge Diane Levison, the San Luis Obispo County Sheriff’s Department seized $40,000 worth of jewelry from the Hagmaiers, as well as their 50-percent interest in a $115,000 Piper Pressurized Navaho airplane.

The suit also included a copy of the Hagmaiers’ financial statement from 1994, opening their most personal economic information to anyone who wanted to see it.

It shows Carl Hagmaier with assets of $4.2 million and liabilities of $2.5 million, for a net worth of $1.7 million. But it also shows the monthly payments and income from his investments in close balance, making the $40,000 monthly salary he claimed from Guardian critical.

But that high salary from Guardian also vanished this year. Effective May 8, as rumors and media reports of Hagmaier’s problems began to circulate, Guardian accepted Hagmaier’s resignation as its general agent and moved out of 444 Higuera St.

Now, Hagmaier is trying to sell the office, asking $899,000 for the 4,600-square-foot third floor and $319,000 for the 1,600-square-foot portion of the second floor that Hagmaier owns–substantially less than what he paid for them.

And even if he can sell the offices, those prices won’t be pure profit. In 1994, Hagmaier’s financial statement said he still owed $962,000 on his income properties, as well as $890,000 for "other real estate notes and contracts payable."

It also now appears that Hagmaier has lost Guardian as an ally.

Last week, the company filed a lawsuit against Hagmaier, claiming they had no knowledge of his alleged misdeeds and saying Hagmaier violated his duties as a Guardian agent and is "primarily liable for any loss or damage."

The suit goes on to point out that Pacific Financial Group and the Carl Hagmaier Agency are "mere shells and shams," and that they were only a front for Hagmaier, who used the companies as tools for his personal business dealings.

"Hagmaier used the assets, accounts, and funds of defendants PFG and [the Carl Hagmaier] Agency without adequate consideration," Guardian stated.

Hagmaier Speaks

The large, plush office of Hagmaier’s Pacific Financial Group is almost empty now. Only his longtime secretary and bookkeeper, Cynthia Fatzinger, has stuck with him.

She makes polite conversation with the visitor in the elegant waiting area, a warm space with purple upholstery and brass highlights. But Fatzinger is acutely aware of the troubles plaguing her boss, and she knew why the visitor was there.

Walking down the long hallways, back to Hagmaier’s large corner office, it is striking just how alone this man now is. The huge office is empty, and the long $12,000 conference table visible from the main hallway sits as a testament to better times.

But Hagmaier says he is getting by, "one day at a time."

Hagmaier disputes Guardian’s assertion that he was "terminated." He offers a letter from Guardian accepting Hagmaier’s resignation effective May 8.

Asked whether Guardian asked for Hagmaier’s resignation, he paused, then answered no. But Hagmaier said his current legal and financial problems are what caused him to part ways with Guardian.

"It was too difficult to try to run an office and deal with this," he said.

He acknowledges that the loss of income makes it difficult to make ends meet.

Hagmaier’s real estate ventures in 1992 seem to have been the beginning of the end for him. He couldn’t satisfy the Rossi loan for the Promontory project or the Commerce Bank loan for the 444 Higuera building. Both failures prompted lawsuits.

But Hagmaier is still evasive when asked whether he regrets getting involved in the deals.

"I’m sure we would all like to redo some things in our life," he said, cocking his head slightly backward and focusing a contemptuous gaze on his unwelcome inquisitor.

Later, Hagmaier said, "I do have one regret, and that is that I ever trusted Rob Rossi."

Hagmaier questioned his questioner about why New Times was doing a story. Why was this such a big deal and couldn’t we just wait? He is still trying to straighten everything out.

"I would hope people reserve judgment until the whole matter is done," he said.

Hagmaier refused to answer most of the substantive questions, citing his lawyer’s admonition about not commenting on pending litigation. But he talked about the emotional issues.

"My wife is the one being hurt the most in all this," he said. He nodded slightly when asked if he feels any blame for that hurt.

Does Hagmaier blame Guardian for any of his problems?

"It doesn’t do anybody any good to point fingers," he said.

Guardian’s Responsibility

With nearly $10 billion in assets, Guardian is one of the biggest life insurance companies in the country. So it’s not surprising that the lawsuits and rhetoric against Hagmaier also target the deep-pocketed Guardian.

"The whole thing is a scam, as far as I’m concerned, and it starts with Guardian," said Jim Duenow, the attorney for PIC Manufacturing and the Camps.

But how much should or could the New York-based company have known about what Hagmaier was up to? Did they know Hagmaier’s clients claimed their signatures were being forged to benefit Hagmaier?

To answer those questions, we need to go back to fall 1989, when Hagmaier called Roy and Therese Bayly and told them he could reduce the premiums on their seven-year-old whole life insurance policies.

Bayly, who owns the chip maker Taco Works, had his life insurance policy converted to one of lesser value, against his stated wishes. He said it was done with a forged signature that he believes was done by Hagmaier or at his direction.

After getting the run-around from Hagmaier, the Baylys complained to Guardian and threatened to go to regulators or law enforcement.

Guardian promptly reinstated their old policy at full value, but wrote, "As to the claims of forgery on various policy documents, we have thoroughly investigated the allegation and are satisfied that no member of the management team at our new San Luis Obispo Agency participated in such conduct."

Guardian was also contacted over the years with similar complaints about Hagmaier. These included a 1992 letter from an Atascadero couple who claim to have been victimized by Hagmaier, who had agreed to pay their premiums to keep them from going to the California Insurance Commission.

Camp says Guardian should have known what Hagmaier was up to.

"If something had happened in 1989, we wouldn’t be where we are today," Dennis Camp said.

Guardian officials refer all inquiries to attorney Dean Morehouse, who said the pending litigation prevents him from commenting on the issues of substance, except to say they are being investigated by Guardian.

Duenow said he doesn’t yet know how much money he will be seeking for the Camps and PIC. "But it’s going to be a big number, because Guardian is worth billions."

Both Duenow and private investigator Alan Bond, who was hired by the Camps, say they believe that Hagmaier has many more victims–most of whom probably don’t even know the policies and equity they think they have are not actually what they have.

They ask anyone who believes they may have been victimized by Hagmaier to contact their offices.

Guardian also seems concerned about the possibility of more Hagmaier victims out there. The company has sent out letters to many of his clients, asking them to compare Guardian’s records with their own to see if there are any discrepancies.

"That kind of contact in this instance was made because of the allegations," Morehouse said.

Epilogue

If Hagmaier knows he has fallen, he certainly won’t admit it or act like it.

"I fully expect to resolve these problems and go on with things," he said.

Asked whether it will be possible to continue doing business in San Luis Obispo County if he can resolve the civil suits and avoid potential criminal prosecution, he simply shrugged.

"What do you think?" he replied.

Indeed, before New Times chose to look into Carl Hagmaier’s life, his good name in the community was already sullied. In the business community, knowledge of Hagmaier’s problems is common, and some are privately cheering his downfall.

But Hagmaier is continuing as before. Last week, he was having work done on his San Luis Obispo Country Club home. The Hagmaiers’ place on the golf course is emblazoned with a big molded "H."

And next month, the Hagmaiers plan to attend the KCBX Central Coast Wine Classic, having reserved two of the event’s top-of-the-line platinum packages, at a cost of $1,650.

Meanwhile, PIC Manufacturing has temporarily abandoned its expansion plans. PIC says having to come up with $1 million to replace the pension fund and pay their lawyers has crippled the family-owned company.

"Everything is on hold until we can get this resolved," Dennis Camp said.

Steven T. Jones is a staff writer for New Times.

<-- Back