Jurors Find Art Theft Faked, Order Claim Repaid

A federal court jury Monday ordered a millionaire plastic surgeon and another man to pay back a $180,000 insurance payment, ruling that it was obtained through the faked theft of artwork from the physician’s Sherman Oaks home six years ago.

The jury also ordered the surgeon, Dr. Kurt J. Wagner, 51, to pay $400,000 in punitive damages to the Federal Insurance Co. and the Great American Insurance Co. A co-defendant, Harvey Rader, 42, of Granada Hills, a mechanic, was ordered to pay $25,000 in punitive damages.

The jury deliberated about 11 hours over two days before affirming the insurance companies’ allegation that Wagner and Rader conspired to stage the theft of lithographs and Oriental artwork from Wagner’s gated Valley Vista Boulevard home.

Lawyers for the insurance companies argued that Wagner was trying to dispose of some of the art because it had been stolen from the notorious Beverly Hills mansion of Sheik Mohammed al Fassi of Saudi Arabia. Wagner also was trying to collect insurance on other works after learning that he had bought overvalued forgeries, they said.

2 Others Exonerated

Two other defendants in the case, Wagner’s wife, and a former art dealer, Neal Krone, were exonerated by the jury.

The two-week civil trial in U. S. District Court in Los Angeles included elements of intrigue worthy of a pulp novel: thefts from a high-profile sheik; key testimony from a wealthy married man’s girlfriend and a British auto mechanic with a history of crime, and a courtroom turned into a gallery of ornate art.

Wagner’s lawyer, David Alkire, said he was “surprised and disappointed” by the verdict and asked Judge Jesse W. Curtis Jr. to dismiss the finding as “inconsistent.”

“Some of the defendants won, and some lost,” Alkire said. “Under the theory of the case as presented by the plaintiffs, that is not a consistent result.”

He vowed: “The case is not over.”

But Barry B. Langberg, attorney for Great American Insurance Co., applauded the awarding of substantial punitive damages.

“Dr. Wagner was a very wealthy man,” Langberg said of the physician, who has an office on South Beverly Drive in Los Angeles. “It takes something like this to do what punitive damages are supposed to do.”

In closing statements in the case, Langberg told the jury that Wagner has a net worth of $8 million.

In 1981, for his part in the thefts of art from Al Fassi’s Sunset Boulevard mansion--noted for its gaudily painted lawn statues before it was gutted by fire in 1980--Wagner pleaded no contest to a misdemeanor charge of receiving stolen property.

The plea, which was expunged from Wagner’s record, was not admissible as evidence in the civil case.

Rader, however, testified that Wagner helped him load boxes filled with the art into his car after driving up to the physician’s home on the night of March 20, 1980.

According to court records, the two men had met the previous year when the Wagners hired Rader, an auto mechanic, to repair and maintain their three Rolls Royces. They advanced him $2,000 later that year to start an auto repair business in Reseda.

Both sides in the case agreed that Rader introduced the Wagners to Michael Lewis, Al Fassi’s chauffeur, who had been stealing art from the sheik. Lewis pleaded guilty to a charge of grand theft after police found some of the stolen art in his apartment.

Lewis welcomed the meeting with Wagner because he wanted to sell some of the stolen art, and also because he wanted plastic surgery on his face, lawyers for Great American said.

“Dr. Wagner, who wished to become a collector of fine works of art, was receptive to Lewis, and indeed performed the desired plastic surgery and purchased works of art stolen from the mansion from Lewis with Rader’s assistance,” the lawyers said in court documents.

But, when a criminal investigation began into the thefts from Al Fassi, the insurance companies said, Wagner decided to “unload his overinsured artworks” and “to get the sheik’s unique ivory pieces out of his house in a manner in which they could not be traced.”

On Exhibit

During the trial, Courtroom 20 became a miniature art museum, serving as home for a Chinese onyx statue, an intricately carved boat and ornate pagoda of ivory, and many smaller statues.

Lawyers for the plastic surgeon and his wife argued that the thefts from the Sunset Boulevard estate were irrelevant to the civil trial.

In court documents, the Wagners said they “did not then know that Lewis lacked authority to sell such property” when they bought art from Al Fassi’s mansion.

The defense also maintained that “the Wagners were unaware of Rader’s criminal record and criminal intentions” when they gave the mechanic money for a business.

Lawyers for the Wagners maintained that the Sherman Oaks theft was a real one, conducted by Rader after he visited the Wagner home and learned that the burglar alarm was out of order because of rain damage.

The defense alleged that Rader was a “career burglar” who, when confronted by police, made up a story to avoid prosecution. Langberg told the jury that Rader had been convicted of felonies 17 times in England.

Wagner’s lawyers argued that it would have been impossible for Wagner to have helped load the stolen art because the surgeon had spent the night with a girlfriend, who testified that he had not been away from her for more than a few minutes at a time. Wagner’s wife was not at home at the time.

Rader later sold the art to Krone for $4,000, court records indicated.

sh Claim Was Paid

The insurance companies conducted a routine investigation of the reported theft at Wagner’s home, then paid the $180,000 claim, according to court records.

In November, 1980, however, police found some of the art in Krone’s Sherman Oaks gallery, setting off a new investigation. Rader eventually was granted immunity from prosecution in exchange for cooperating with police.

The art theft is not the only criminal case in the United States with which Rader has been associated.

In 1983, Rader was arrested with a boyhood friend, London cab driver Ashley Paulle, 44, on suspicion of murdering six members of two San Fernando Valley families, whose bodies have never been found.

But charges against Paulle were dismissed by a judge, and Rader was freed after the district attorney’s office concluded it did not have enough legally admissible evidence to charge him with murder.

When the insurance companies filed suit in the art-theft case, the Wagners filed a countersuit against Great American for money they claimed was owed them for the thefts. But the jury Monday also ruled in favor of the insurance company on that claim.