PAGE 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 Tiburon.

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 with Piller.

``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 trade group.

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. Nothing happened.

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.