Wagner’s acts shady in retrospect

Deirdre Newman

Hindsight is 20/20.

That’s what some of the people who knew Stephen Wagner -- who 10

years ago came under scrutiny for embezzling money from the

Newport-Mesa Unified School District -- would say about signs Wagner

showed of his misdeeds before he was arrested.

Eventually, the former budget director would plead guilty to

embezzling $3.5 million from the school district.

“When we asked him a question, sometimes he would turn bright red,

but who would make a connection like that?” said Martha Fluor, who

was on the school board at the time. “Now, in retrospect, you think,

‘Gee, was he lying and did we catch him? Was he uncomfortable? Was he

working extra time just to cover up his tracks?”

Wagner reportedly worked for the district for 18 years before he

began embezzling. His opulent lifestyle, including driving Rolls

Royce’s and wearing mink tuxedos to school functions -- on a yearly

salary of $76,200 -- did not raise any eyebrows. He told people the

money came from the stock market or buying or selling precious

stones, said trustee Judy Franco, who was a trustee at the time and

is running for reelection this fall.

He had a pleasant demeanor, by all accounts. He was the one person

trusted to get the district’s financial books right.

“He appeared to try to be helpful,” said Sherry Kallab, one of the

“gang of five,” a group of parents who took it upon themselves to

investigate the district’s finances eight months before Wagner was

put on leave because of a $1-million budgeting error that threatened

the layoff of elementary art, music and P.E. teachers. “He was

cordial, polite, but not real willing to give a lot of information or

explain why there were differences in certain areas.”

Wagner was young when he came to the district, and

then-superintendent John Nicoll took him on as a protege, Fluor said,

investing him with a good deal of trust and responsibility.

Nicoll remains tight-lipped when it comes to the subject of

Wagner, conveying his emotions -- which have had a decade to roil,

dissolve and surge again -- in measured words.

“I trusted him and he broke the trust,” Nicoll said.

Wagner was also known as a workaholic, which made him look devoted

to his job, Fluor said.

“He was always there on the weekends,” Fluor said. “In retrospect,

sure, he did some of the dirty work on the weekends.”

From jail, Wagner wrote Kallab a letter of apology. He eventually

died of complications from AIDS while still in prison .

“I felt kind of sorry for him,” Kallab said.

Kallab added she believes Wagner was tempted to embezzle to keep

up with the expensive lifestyle of Newport Beach.

His death will leave the answer to exactly “why” forever unknown.

* DEIRDRE NEWMAN covers education. She may be reached at (949)

574-4221 or by e-mail at deirdre.newman@latimes.com.