Wealthy Plastic Surgeon Accused of Fraud : Jury to Decide If $180,000 Theft Faked

When plastic surgeon Kurt J. Wagner reported the theft of lithographs and Oriental art objects from his Sherman Oaks home in 1980, his insurance companies conducted a routine investigation, then paid him $180,000. There was little reason to doubt that a millionaire physician might be the victim of such a robbery.

Six years later, however, the insurance companies are asking a jury to order Wagner and two other men to pay them back--and award them punitive damages as well.

During a civil trial heard over the last two weeks in federal court in Los Angeles, the insurance companies have tried to prove that the burglary was faked, part of a scheme by the three men; “a tangled web of deception and deceit,” Barry Langberg, a lawyer for the Great American Insurance Co., called it Thursday in his closing argument.

Stolen Artworks

Great American and the Federal Insurance Co. allege that Wagner was trying to dispose of art that had been stolen from the Beverly Hills mansion of Sheik Mohammed al Fassi, as well as artworks Wagner had bought and later learned were forgeries.

Wagner, 51, and his wife, Kathleen, maintain that the burglary was genuine, and they are countersuing one of the insurance companies for money they say is owed for their loss.

The jury began deliberations Thursday afternoon.

The case turns on two very different interpretations of events at the Wagners’ plush Valley Vista Boulevard home the evening of March 20, 1980, and on the credibility of a British immigrant who testified that Wagner arranged for him to take the art.

The alleged accomplice, Harvey Rader, 43, of Granada Hills, said he then gave the art to Neal Krone, vice president of a Sherman Oaks art gallery. Rader and Krone also are being sued by the insurance companies.

Rader testified that Wagner helped him load boxes filled with the art into his car after he drove up to the surgeon’s home about 10 p.m. on the night in question, honked his car horn and was admitted through an electronic gate.

But attorneys for Wagner and Krone argued that Rader was a “career burglar” who made up the story to avoid being prosecuted for the theft. Rader was granted immunity from prosecution in exchange for cooperating with police.

Defense attorneys cited testimony from a woman who spent the night with Wagner that she and the doctor were never out of each other’s company for more than a few minutes at a time.

Stolen While He Slept

“Dr. Wagner had no opportunity to load up these boxes,” the physician’s lawyer, David Alkire, told the jury. He said the art was stolen while Wagner slept.

Langberg, however, said it was virtually impossible for burglars to steel the heavy artworks without waking Wagner, his companion and several children in the house.

The thieves would have had to be “the best burglars I ever heard of; the stealthiest, strongest, sneakiest, cleverest burglars that ever were in L.A. County,” Langberg said.

Wagner in 1981 pleaded no contest to a felony count of receiving stolen property and was sentenced to probation for his part in the theft of art from Al Fassi’s mansion. The goods were taken from the Sunset Boulevard estate, noted for its gaudily painted lawn statues, before it was gutted by fire in 1980.

But a no-contest plea cannot be used as evidence in a civil trial.

Carved Ivory Boat

Langberg argued that an intricately carved ivory boat recovered from Krone, and on display in the courtroom, was one of the items stolen from Al Fassi’s mansion that wound up in Wagner’s home.

Wagner knew the boat had been stolen, Langberg said, and “a convenient way to get rid of this piece of property when things started to blow up is to have a burglary.”

Wagner testified that he bought the boat for $5,000 from a South Carolina man.

The Wagners also were trying to dispose of five lithographs they had bought at inflated prices that in reality were forgeries, the insurance companies alleged.

Lawyers for both sides made much of a February, 1981, conversation taped by Rader in cooperation with police. In it Wagner denies that he would rob his own home.

“To burglarize myself with my children in the house is insane,” Wagner says on the tape.

Langberg argued that Wagner knew he was being recorded and tried “to make things look as good for himself as possible.”

Wagner’s lawyer said the tape proved the doctor’s innocence.