ONE -- The Dark Side Of Duane Garrett
Friends say he bilked them
Michael Taylor, Chronicle Staff Writer
Tuesday, December 26, 1995
FRIEND OF GARRETT
Popular talk show host
and influential political insider Duane Garrett, who committed suicide last summer, was so entangled in a web of debt and
deceit that he routinely bilked investors who were also his friends and associates, recently filed court records show.
The new records, filed as part
of probate proceedings in Marin County Superior Court, shed new light on the extent of the financial problems that Garrett's
closest friends believe led him to jump from the Golden Gate Bridge
on July 26.
Garrett's suicide stunned fans
of his KGO-AM radio talk show and shocked his powerful friends, such as Vice President Al Gore and Senator Dianne Feinstein.
Garrett, who was also a lawyer, had been the campaign chairman for Feinstein's senatorial races. The senator hosted a benefit
dinner at her house in October to raise money for Garrett's widow and two daughters.
Garrett appeared to have everything
in life -- fame, money, family. He had a reputation as a gregarious, generous man and was an astute collector of wine, art,
stamps and sports memorabilia. His self-confident public image made his suicide at the age of 48 that much more puzzling to
his many friends.
After Garrett died, creditors'
claims against his estate amounted to more than $4 million, including $3 million for a loan from Wells Fargo Bank in 1994.
Records filed over the past month show that Garrett had additional debts of more than $1 million, including nearly $35,000
on an unpaid MasterCard account and $135,405 in unpaid federal income taxes from 1994. More than $915,000 of the new claims
is owed to friends and associates.
At the time of his death,
Garrett's estate was estimated to be worth less than $600,000, most of it tied up in his heavily mortgaged hilltop home in
The lawyers handling Garrett's
estate and Garrett's friends and business associates said they knew little about the depth of his financial problems and could
shed almost no light on why Garrett committed suicide.
But the latest court records
show Garrett had a pattern of persuading friends to invest in sports memorabilia or stamp deals, promising their investments
would be paid off with profit after the items were sold. But in a number of instances, Garrett failed to pay off those investors.
Instead, Garrett's friends
and former associates believe, he used a complicated Ponzi scheme in which he borrowed from one person to pay off the debt
he owed to another. Ultimately, the scheme became so frenetic that Garrett took his own life rather than go through what he
perceived as the humiliation of bankruptcy protection, his friends said.
In one complicated deal, court
records show, Garrett obtained a jersey worn by New York Yankees star Lou Gehrig and sold it to Oakland
stamp dealer Stanley Piller for $200,000. Piller then apparently consigned it back to Garrett so Garrett, in his role as president
of the Richard Wolffers auction house in San Francisco, could sell it for more
money at an auction of sports memorabilia.
The jersey disappeared earlier
this year, along with Piller's $200,000. Piller later filed a claim against Garrett's estate. The Chronicle has learned, however,
that the jersey is now back in the hands of Elmsford, N.Y., memorabilia dealer Barry Levine, who says he originally sent it
to Garrett about one year ago because Garrett said he could sell it for Levine. Levine said he knew nothing of Garrett's agreement
``I never heard any of these
names,'' Levine said from Elmsford the other day, when asked about the deal. ``I sent the jersey out to Duane because he said
he was trying to sell it to somebody. Finally, I said I want the jersey back because my insurance company wants it under my
lock and key.''
Garrett returned the jersey
to Levine in early June. Levine said he was surprised Garrett had received $200,000 for the shirt -- ``we had an agreement
that I would get $110,000, and he would keep anything above that.''
Legal ownership of the jersey
is now ``up to the lawyers,'' said one source close to Garrett for many years.
Neither Piller nor his lawyer
would comment on the deal.
AN OLD FRIEND'S CLAIM
Another creditor, Oakland
attorney Spencer Kaitz, said in his $456,000 claim that he and his wife, Roberta, had known Garrett since their days in law
school in the early 1970s. Kaitz is president and general counsel of the California Cable Television Association, an industry
Kaitz said in his court claim
that he and Garrett ``began investing in stamps together in law school.'' Eventually, this investing relationship blossomed
to the extent that by January 1994, the Kaitzes had invested $300,000 in a joint venture with Garrett to buy 112 uniforms
of well-known basketball players and resell the clothing for as much as $955,000.
Later that year, Garrett excitedly
told Kaitz he was going ``to sell the jerseys at the NBA (National Basketball Association) playoff auction in 1995,'' court
records show. By July 1995, Kaitz was calling Garrett, asking when he might get his money.
``Duane stated that the auction
had gone very well and that I would be very pleased with the results,'' Kaitz's claim says, and that ``we could absolutely
count on having our money by August of this year.''
Garrett never returned
their investment, the Kaitzes say in their court claim.
In an interview, Kaitz said
that despite the loss of the basketball deal money, as well as thousands of dollars in stamp and art investments with Garrett,
``I still really miss Duane.''
``He may well have defrauded
Roberta and me out of close to half a million dollars, but he was still an amazing person,'' Kaitz said. ``I'm hardly an innocent,
and I have a lot of business involvements. But Duane Garrett is the only person I'd send $300,000 to. The dark side (of Garrett)
was something none of us saw. It was a shock to all of us.''
A FINAL BOUNCED CHECK
In another transaction, San
Francisco investor William Rothmann lent Garrett $227,000. Garrett was supposed to use the money to
buy ``items to be resold at public auction,'' court records show. In June 1994, Rothmann asked Garrett to return his money.
On July 26, Garrett wrote a
check for $137,114.60 and gave it to Rothmann. Hours later, Garrett jumped to his death. The check bounced within a week.
Rothmann's claim against
the estate has now increased, with interest, to $364,614.
$6.5 million in additional claims against Garrett
Donna Horowitz, SPECIAL TO THE EXAMINER
Saturday, December 30, 1995
Creditors seek total of $11.5 million
SAN RAFAEL - Last-minute claims filed against the estate of radio talk show host Duane Garrett have brought
the total sought by creditors to $11.5 million.
Just before closing time Thursday - the last day to file a claim against the estate - creditors rushed
into the Marin County Superior Court clerk's office and filed about $6.5 million worth of additional claims.
Garrett, 48, of Tiburon, jumped to his death from the Golden Gate Bridge on July 26, leaving a wife and two daughters. The popular
KGO-AM talk show host, lawyer and political operative, shocked fans and friends alike by committing suicide.
The latest claims against Garrett's estate are among the biggest. They include $2,674,101 by Richard
Wolffers Auctions Inc. in San Francisco;
$1,519,410 by the Duane B. Garrett Fund; and $1,423,731 by Gordon Rausser of Berkeley.
Neither attorneys nor claimants were available for comment or to provide further details
of the claims.
In its suit, Wolffers, a sports memorabilia auction company in which Garrett was president,
said its claim includes $1,610,433 it is seeking to pay for items the company sold on consignment.
The Duane B. Garrett Fund, according to court papers, said $1,269,410 worth of items were
purchased by the sports-memorabilia investment fund with fund assets. Garrett, who set up the fund, had agreed to repay the
amount, but never did, the suit said.
The Garrett Fund said it also is trying to determine the value of items it owned through
participation with Garrett in a group known as the Hard Fund, for which payment was not received. The Garrett Fund estimated
the value of the items at $250,000.
On July 11, shortly before he jumped from the bridge, court papers show that Garrett signed
a promissory note to pay Rausser $1,266,974, plus 12 percent interest, on Aug. 16. Rausser also said he is trying to determine
how much he's owed through the Hard Fund group, though he estimated that $150,000 is due him.
Leo Simon, treasurer of the Shakespeare Development Corp. in Berkeley, also filed two claims
- for $556,191 and $78,020. He said in court papers that $557,000 is for money plus interest that he invested since 1991 in
the Wolffers Fund. He said Shakespeare Development is owed $70,000, plus interest