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Pre-Auction Peek Reveals Extravagance of Wagners : Lifestyle: Bids on property will be taken May 26 at the home of Stephen and Linda Wagner to recover some of the $3.5 million he stole.

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TIMES STAFF WRITER

Back in the good old days, before Stephen A. Wagner landed in the Orange County Jail for embezzling nearly $4 million from the Newport-Mesa school district, he liked to step out of his shower into a hooded bathrobe lined with black silky fur.

Wagner and his wife, Linda, clearly enjoyed the feel and look of exotic furs. Even with Southern California’s moderate temperatures, the closet of their home in Newport’s Back Bay was crowded with at least 15 fur coats--eight designed for women and seven for men--made from mink, beaver and fox.

The lavish lifestyle that Wagner financed with money siphoned out of school district accounts is scheduled to be put on display at a May 26 auction. Authorities hope that the sale of the Wagners’ property--seized during the investigation--will help recover some of the missing funds.

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“He gives me the impression of someone who was free with other people’s money,” said Theodor C. Albert, the court-appointed trustee for Wagner’s estate. “He and his wife had the reputation of living very lavishly and, basically, showing off with jewelry and fancy cars. He had diamond studs on his tuxedo--that kind of ostentation.”

Wagner, who rose from bookkeeper to top money man in the Newport-Mesa Unified School District, pleaded guilty in December to embezzling at least $3.5 million in government funds over a five-year period. Authorities say Wagner turned an employee savings account into a secret slush fund from which he diverted millions of dollars to banks around the world.

He is scheduled to be sentenced in Orange County Superior Court on June 11. He faces up to eight years and eight months in state prison.

The auction is scheduled to include the Wagners’ Back Bay home, which has an estimated value of about $1 million. It has 5,000 square feet of space, four bedrooms, a three-car garage and a partial view of the Back Bay. The auction is scheduled at the house at 1301 Galaxy Drive.

The auction list will also include Wagner’s 1964 burgundy Rolls-Royce as well as his wife’s Champagne-colored 1990 Mercedes 800TE. There is also a gold-plated, grand piano finished in ebony.

Friday, officials gave a reporter a glimpse of a few smaller items. Officials declined to reveal the value of several of the items because they did not want to influence bidders at the auction.

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In addition to the fur-lined bath robe, the showing will include a 5,600-carat emerald in its “natural, rough” condition. The stone, slightly bigger than a fist, is displayed on black velvet in a wooden box.

Robert Goe, an attorney involved in the liquidation, said Wagner purchased the stone in North Miami Beach, Fla., for about $100,000. There are also several pieces of gemstone jewelry that will be auctioned.

But Goe and Albert declined to discuss whether Wagner purchased the items because he was a collector or whether he just liked them for show. Instead, Albert called Wagner a “gem speculator,” suggesting that the stones may have been one way Wagner hid the stolen money.

The auction list includes six diamond rings, including a gold 18-karat woman’s wedding band decorated with platinum and diamonds.

The walls of Wagner’s home in Newport Beach were also decorated with an art collection signed by some of the world’s most famous painters.

There are eight pieces signed by Salvador Dali including etchings, lithographs, serigraphs and one stencil. Four lithographs are also signed by Marc Chagall.

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Albert was a bit mysterious about one etching of Jesus Christ, standing before an ailing man, that is attributed to Rembrandt. “We are not going to make a statement as to whether it is an original,” Albert said.

Albert’s agent, Jan Schlessel, said art experts have looked at the piece and been unable to determine its authenticity. Albert said he does know how much Wagner paid for the piece, but he declined to reveal the amount.

Despite the wealth displayed in Wagner’s seized property, officials downplayed their hopes of recovering much of the missing money in the auction. Albert suggested the sale could generate up to $400,000.

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