From Black’s Beach you look up and see the house poised fragilely on a sheer cliff, opalescent in the dim light of dusk. Gaze due north along the Torrey Pines Cliffs from Scripps pier and it captures your eye. The Gagosian mansion, a gargantuan monument to conspicuous consumption, is marked by a bright green roof of oxidized copper and a 15-year history as bizarre as it is dense. Most recently appraised at $20 million, it is the biggest, most expensive house in La Jolla, and is certainly one of the most notorious in all of Southern California.
Talking about the Gagosian mansion is a rigorous workout in superlatives. Ralph Dalton, a La Jolla realtor who once sold the house, calls it “the ultimate ego trip.” Indeed, some big egos have chosen to live there: Earl Gagosian, the millionaire who built it, founder of the Royal Inns, a nationwide chain of hotels; Charles Leggett, conman extraordinaire turned government informant, dubbed the greatest swindler in Chicago history by the Chicago Tribune; Richard L. Burns, founder of a multimillion-dollar oil, gas, and coal exploration firm; Kevin Rogan, managing director of IFM Funding, a west German company that operated Picnic ’N Chicken restaurants; and Nader Yazdani, son of a man who was once one of Iran’s most powerful industrialists.
Few people can afford the Gagosian mansion, now listed at $8.6 million (well under its appraised value). Perhaps fewer still possess a sense of self that can expand to its scale. Its thirty-three rooms (including nine bedrooms, three kitchens, and thirteen baths) cover more than 17,500 square feet. The living room alone, at 2400 square feet, is bigger than most houses. The enormous 100,000-gallon swimming pool, set among palms, ferns, and other tropical plants, is spanned by a 74-foot bridge that was built, according to Gagosian, “at a horrible expense.” Decorating several walls are murals that were hand carved in stone by some forty craftsmen from Cuernavaca, Mexico. Three chandeliers hang from the ceiling in the living and dining rooms, each one elaborately ornamented with gold leaf. Just about every room has a spectacular ocean view through tinted glass with bronzed casements. Outside, on an acre of manicured lawn, is a golf green with a sand trap. The most unusual feature of the house, however, is its roof — or, more precisely, its roofs, the several structures made of ribbed copper that rise around the perimeter of the house like so many stove hoods. From far out at sea the house is a tiny dull emerald that boats from nearby Scripps Institute of Oceanography use as a landmark. Gagosian says he spent $90,000 on the copper alone in attempting to imitate the copper castles he’d seen in Europe.
But the features of the house are only as unusual as luxury. The story of the people who lived there makes for a narrative both rich and rare. Three of the five owners have been victims of foreclosures. One of these, Leggett, was evicted along with his family and took up residence in the San Diego County jail. Gagosian, Burns, Rogan, and Yazdani all experienced severe financial difficulties while they owned the Gagosian mansion. Four major companies fell apart while their owners held title to the house; three ended up filing for bankruptcy. Kings, princes, and movie stars have inquired into buying it. Ronald Reagan has toured it. So has Spiro Agnew. One of the Gettys wanted to live there, actually had the house in escrow, but died suddenly of cancer before the deal could be closed. Gagosian was led halfway around the world trying to collect a house payment, and he believes to this day that his debtor may have had plans to murder him. When Leggett lived in the house, two Mafia hit men paid him a visit. Luckily, he wasn’t home. Yazdani, in a desperate move to make delinquent payments and stay in the house, swindled some big-time Salt Lake City financiers, and ended up fleeing the country in fear for his life.
The price of opulence has been considerable misfortune for the inhabitants of this splendid if somewhat overbearing house. Though misfortune never came about specifically because of the house, or even because of its expense, many speak of the place as “jinxed.” Others say that’s nonsense. They say that such an exotic home naturally attracts certain types of personalities, driven men with big egos who inhabit a precarious world in which one stands to lose as big as one stands to win.
In 1968 Earl Gagosian and his wife Kay decided they were ready to build a new home. The Royal Inns were, according to Gagosian, “going like a gangbuster,” the two kids were in their teens, and the hotel magnate had always wanted to live near the water. So in 1968 he bought nearly six acres on the cliffs above Black’s Beach for $180,000. “I thought I was nuttier than a fruitcake when I paid that price,” Gagosian recalls today. “But you know that now it’s worth about nine million.” On that land he built his dream house, which was designed by local builder Konrad S. Leak with significant modifications suggested by Gagosian, his wife, and his children. Originally intended to cover only 8000 square feet, the design ballooned along with the price, which, after building costs and furnishings, came to about two million dollars. “In 1970, when work began on the house, two million didn’t mean that much to me,” says Gagosian.
This was the same man who, just out of the Navy in 1945, went to work as a laborer for Travelodge. Within a year, after numerous promotions, he was supervising all construction for that company. Gagosian became a vice president in 1950 and says he worked without a vacation or a day’s sick leave for 14 straight years. In 1965 he started the Royal Inns and quickly made a fortune. “I’ve built 300 Travelodges and 69 Royal Inns, including one that is now the Holiday Inn Embarcadero,” Gagosian says with paternal pride. “That comes to one hotel a month for thirty years.”
For Gagosian, building his mansion was an affirmation of ego, a promiscuous indulgence in the power of choice. Gathered around the design sheets, Gagosian and his family proposed amenities: A tennis court? An eight-car garage? A 1500-bottle wine cellar? A marble Roman bathtub? Bronzed fire pits? Electric toothbrush driers? A separate, self-contained suite for each of the kids and two more for guests? Affirmative on all counts. To this day Gagosian loves the house. “It’s gorgeous,” he says. “Some people think it looks like a hotel, but I’ve seen a lot of nice homes in my life and I’ve never seen one more beautiful.”
Gagosian’s raves aside, many people who have seen the mansion comment that the great house is much less a home than a single-family motor lodge. Not only is it depersonalized by its garishness (one critic called it “a collision between too much money and too little taste”), the Gargosian mansion is elephantine, so big that it lacks any sense of intimacy and coziness. The kitchen is enormous, like a restaurant kitchen, not the kind of place grandma would be comfortable baking cookies. The living room would make a suitable convention center lounge. The various apartments are separated by great distances, so great that sending a child to his room might seem like banishment into a temporary exile. One lawyer who toured the house when Charles Leggett lived there says the Gagosian mansion would be ideal for an Arab sheik with four wives. “You put one wife in each of the four apartments, you get yourself a pair of roller skates, and every night you make the rounds, skating from one wife to the next.”
“We set out to make that house a showplace,” says Konrad Leak, who claims he completed the basic design of the mansion in a mere five hours. “It’s all personality when you build a house for someone. Earl Gagosian is a flamboyant, egotistical man, like a lot of wealthy people are. He wanted a house that was unusual, and that’s what he got. I actually had to tone it down a little, so that it wasn’t royal blue and gilded.”
Gagosian, of Armenian and English descent, is a healthy-looking man in his mid-fifties with red hair and a matching ruddy complexion. In a recent interview at the office of his latest company, Hotel Properties, developers of the Continental Inns, he was all charm and urbanity, a distinct contrast to his reputation. Mere mention of his name provokes a barrage of unsolicited commentary from those who have dealt with him in the past. “He’s a wild egotist.” “He’s an uneducated coal miner from Utah with all the guts in the world.” “He’s irascible.” “He’s very smart, but I don’t trust him.” “Guys like him are a personality breed in themselves; they’ve got to have it all, and they’ve got to have it now.”
Gagosian had it all — the money, the cars, the prestige, the influence, and a mansion in which to display it. But, ironically, right at the time he moved into the house, his pattern of uninterrupted success was broken. The Royal Inns fell into deep financial trouble. In April of 1973, Gagosian resigned as chief executive officer and director of his own company. He attempted a surprise comeback a year later, but it failed, and in June of 1975 the Royal Inns of American filed for bankruptcy. Ten years later there is till some debate over why the hotel chain came upon hard times. Gagosian claims the energy crisis did him in, and it is very likely that his firm would have survived had the oil market remained stable. Others say Gagosian didn’t know when to stop, that he was blinded by his own success. Royal Inns stockholders filed a class action suit contending that the company’s financial statements ere misleading; the profits they showed were created in the books by the venture interests (i.e., the building of hotels) and not by the hotel operations. “The hotels weren’t making any money,” says a San Diego court-appointed trustee who worked on the case. “Gagosian didn’t realize this. He saw all these apparent profits on the balance sheets, he saw the stock market going through the ceiling, and he honestly didn’t know his company was in trouble. He was a builder, and a good one, but he wasn’t a hotel operator.”
Though Gagosian moved out of his mansion in the spring of 1973, just when he resigned from his Royal Inns post, he insists today that money had nothing to do with his decision to leave. He says he and his wife were deluged with calls from charities and churches asking to use the house for fundraisers, a problem later owners would experience as well. “The thing became sort of an albatross,” Gagosian recalls. “I was kind of the top dog in town and it was hard to say no. If you turn down a charity, you’re a dirty bird, so we used to let everyone use the house.” According to Gagosian, the “straw that broke the camel’s back” came in December of 1972 when Jim Mulvaney, president of the U.S. National Bank, which has just loaned the Royal Inns four million dollars, called and asked if his wife’s club couldn’t hold a fundraiser at the house. “It was two days before Christmas,” Gagosian recalls, “and we had 500 people in our house, going around rubbing the wallpaper, saying, “Isn’t this nice wallpaper?” We were happy with the house but not with the environment we were creating, so I put the house on the market.”
In early 1973 Charles Leggett came along, charming, stylish, glib — and incredibly rich. Or so it seemed to the unsuspecting Gagosian, whose already faltering company now had an oil embargo to contend with. Leggett called him one day, supposedly by radio telephone from his 102-foot yacht in the Pacific, introducing himself as a gold speculator with $32 million in Swiss banks. He wanted to buy the house. In later conversations Leggett told Gagosian he had 14 investors lined up who could bail out the Royal Inns. To Gagosian, this man must have seemed like a gift from his guardian angel. A buyer for his house, the savior of the Royal Inns.
Gagosian agreed to sell the mansion for $1.8 million. Through the Curtis-Coleman Company, a mortgage banking concern now located in Scripps Ranch, Leggett obtained a $1.5 million loan from Baltimore Federal Savings and Loan. As security he used a $.175 million certificate of deposit, indicating that he had that sum in an account at Continental Illinois National Bank in Chicago. Title Insurance and Trust Company (now Ticor Title Insurance) insured the loan after calling Continental Illinois and verifying the validity of the certificate of deposit.
From his $1.5 million loan, Leggett paid Gagosian $704,000 in cash, which paid off the existing liens on the house, and offered a $1.1 million unsecured promissory note payable in Swiss francs at a bank in Zurich. Leggett moved into the mansion immediately and assured Gagosian that he would pay cash on the note within two weeks. But he stalled for an entire year, insisting that his personal doctor, a man named Rosenova, cautioned that his “heart problems” made travel unwise.
“I started thinking something was wrong when he kept stalling,” recalls Gagosian, “but you don’t want to believe that you’re being swindled. I considered myself pretty bright at that time, but Leggett came on so strong. When you see a guy come along and get a $1.5 million loan just like that, doesn’t it tell you he’s a man of substance?’
George Coleman of Curtis-Coleman was equally impressed by Leggett. “That guy could talk to a girl at Fifth and Broadway at high noon and tell her to take off her pants and she’d do it. That son of a bitch was so smooth, you couldn’t believe it. He had a voice like Gregory Peck. Beautiful resonance. Clear diction. And he talked as if he knew exactly what he was talking about, even when what he was saying was absolute stupidity.”
For a year Leggett paid monthly interest on the Baltimore Federal loan. But in the summer of 1974, when the loan was due to be paid off, he couldn’t come up with the money and was scrambling to refinance. Gagosian, who still hadn’t seen a penny of his $1.1 million balance, started getting nervous, and he pushed Leggett to pay up on the promissory note. After plans to fly to Zurich were aborted several times, Leggett finally bought four first-class tickets on Air Canada via Montreal. He, his attorney, Dr. Rosenova, and Gagosian were to leave on a Friday in September, but the day before the departure Leggett told Gargosian that his doctor advised against travel until Monday. Heart problems. Gagosian, exasperated, said he’d leave right away and meet the others in Zurich on Monday. They never showed. “I waited there a whole month,” says Gagosian. “They wouldn’t tell me anything at the bank. I bugged them so much. Finally I called Mrs. Leggett in La Jolla and she told me her husband had been dragged off a plane in Montreal with a heart attack, and he was in the hospital. So I got on a plane and went to Montreal and checked out every intensive care unit in town and he wasn’t there.”
Gagosian now knew he’d been conned. Coleman, Baltimore Federal, and Title Insurance weren’t sure yet, but were about to discover a most embarrassing truth about Charles Leggett. Because Leggett had stopped making payments on his loan, Coleman filed a notice of default and ordered Title Insurance to “move in on the $1.75 million certificate of deposit,” to take it to Chicago and collect on it. Bu the Title Insurance officer who represented the certificate at a Chicago branch of Continental Illinois was told that there were no funds backing it up. The hapless courier didn’t have to ponder this mystery very long because he was promptly surrounded by Secret Service men and FBI agents.
In the month that followed, the bizarre story of Charles Leggett unraveled. The reason Continental Illinois had refused to pay up on the certificate of deposit was that they had strict orders from the federal government not to. A federal strike force had asked Continental to issue the certificate in Leggett’s name so that he could present it as “flash money” to sellers of stolen securities. Leggett was an underworld conman working for the feds. He was their star, a first-class sting man with a forked tongue of solid gold and absolutely no fear. Using this “flash money” to establish his credibility, he had already recovered more than $11 million in stolen securities, and his testimony had failed numerous Mafia thugs. It was incredible, one justice authority said, that Leggett had never ended up in some car trunk.
It was also incredible, to local victims of Leggett’s scam, that the federal government would use a crook to catch crooks and not worry about innocent people who might get hurt along the way. The federal strike force was sure that the man who represented the certificate of deposit at Continental Illinois was a big-time thief, another fish reeled in by their boy Leggett. Weren’t they surprised when they found he was a humble employee of a legitimate company? Weren’t they surprised when they found Leggett had taken the bogus certificate they’d given him and used it to buy the most prestigious house in San Diego? Weren’t they surprised to find that they’d been stung by their own bee?
Knowing Leggett’s background, the strike force should have expected it. The 62-year-old Leggett had a criminal record that dated back to the 1930s. In 1971 he had been convicted and sentenced to 18 months for tax evasion (he served only two months). Earlier, in 1962, he was jailed for grand theft and wire fraud. Three years before that, the federal government had nailed him for “interstate transportation of stolen vehicles,” a rather fancy term that suits Leggett’s crime nicely. “Car theft” would have described much too prosaically the swindle in which Leggett made off with 529 Volkswagens.
Gagosian, obviously, was hopping mad when Leggett’s story unfolded. He’d been swindled out of a million dollars, and the American government was responsible for it! He immediately filed suit against Leggett, Title Insurance, Curtis Coleman, Baltimore Federal, Continental Illinois, and the federal government. Baltimore Federal then sued the government and Continental Illinois. Continental Illinois in turn sued the federal government and Leggett. During the following year, more lawsuits were filed in connection with the house than there were rooms in it. One of these was filed by Vivian Leggett and her sister Madeline Nencini, both occupants of the house. They sued Gargosian for “false imprisonment,” insisting that Gagosian had accosted them near Torrey Pines Road and La Jolla Shores Drive. He drove alongside them waving his fists and cursing them, they charged. Then he blocked their car in a cul-de-sac, where he took their keys and held them for half an hour. The women sought a court order preventing further harassment.
Some of the suits involved the eviction of Leggett, his daughter Lisa Weinberg, his wife, his sister-in-law, and the family’s ferocious German shepherd attack dog, Huckleberry. Other suits concerned the legality of Baltimore Federal’s purchase of the house in April of 1975. Baltimore Federal, represented by Curtis-Coleman bought the house for $750,000 at an auction on the courthouse steps. The only other bidder was a mysterious man named Cooper, who said he represented South American diamond interests. The local press reported that Cooper had a “certificate” for three million dollars, but which was not immediately negotiable, and that he spent a frantic hour in a phone booth trying to contact his bank in Scotland and come up with some cash. But he failed, and the sale went to Baltimore Federal.
Within two weeks the bank filed suit to evict the Leggetts. Lisa Weinberg contested, saying that the sale was illegal because the only other bidder, Cooper, had been unjustly excluded. The whole thing had been rigged, she said.
It certainly had. Cooper, it was later revealed, was a conman himself, an old buddy of Leggett’s who specialized in gold smuggling and selling phony masterpiece paintings. “He was just there to screw up the sale,” says Coleman. “It was just so much baloney.” Nonetheless, Cooper’s antics bought the Leggetts more time rent free in the Gagosian mansion. They weren’t evicted until six months after the auction.
In August of 1975 the U.S. Attorney obtained a court order to search for $593,000 believed to be in Leggett’s possession. That sum represents what the government estimated Leggett had left of the $1.5 million bilked from Baltimore Federal after he’d given Gagosian $704,000 upfront and paid interest and maintenance on the house for one year. Back in 1973, he’d put the money from the Baltimore Federal loan in safe deposit boxes at the Southern California First National Bank on Laurel Street. But two years later, when the authorities, armed with the court order, came to open the boxes, the were, to no one’s surprise, empty. None of this money has ever been recovered.
However, two months later Deputy District Attorney (now Judge) Robert O’Neill charged Leggett with two counts of grand theft and had him put in jail on $100,000 bond. A fascinating cat-and-mouse game ensued between the two men. O’Neill, the better to work his case against the slippery con artist, needed to keep him behind bars. Leggett wanted out. His first move was to try to use furniture from the house as collateral to get himself released on bail. But O’Neill saw Leggett’s coup coming, so he raced out to the property and, after threatening to crash the gate, was finally admitted by Leggett’s wife and daughter, who had rolled up some of the carpeting and were preparing to make off with several pieces of furniture. Some time later, Leggett requested permission to go to Europe to gather evidence for his trial. O’Neill blocked him. The Leggett did what he always did when all else failed — he had a heart attack. A bogus one, of course. “Apparently he grabbed his chest, went into convulsions, and shouted, ‘This is the big one!’” says Judge O’Neill. “But the guards had been tipped off. We had monitored his conversations with his wife and he’d told her he was going to do it. We took him to Mercy Hospital just in case, but they checked him over and sent him right back to jail.” In October of 1976 Leggett pleaded no contest to the first charge against him and was sentenced to two years in San Quentin. He reportedly served less than a year. When asked if the federal government ever charged Leggett with any crime relating to the use of the phony certificate of deposit, O’Neill laughs. “Are you kidding? He’s probably working for them again.”
Though process servers had been held off for months by an electronic fence and the forbidding mien of Huckleberry, Vivian Leggett, Madeline Nencini, and Lisa Weinberg were finally evicted from the Gagosian house in mid-November of 1975, more than two years after they moved in. The press was there to cover the event. It was reported that lying around the house were several empty bottles of cheap champagne and a beverage called Royal Occasion. The 1500-bottle wine cellar, however, was empty. Reporters noted that Lisa Weinberg, while packing her bags, stopped to paint her fingernails red and black on alternating fingers. On her bedroom walls were teardrop illustrations and the words, “Thanksgiving is near, but we shan’t be here.” George Coleman found on the walls of the downstairs laundry room several photographs of Weinberg in various stages of undress, wearing garter belts, bras, stockings, and hourglass girdles.
With the Leggetts ten years behind him, Gagosian shows little bitterness toward the people who made him the victim of one of San Diego’s most colorful swindles, partially because he seems to have mellowed with age, and partially because he got all his money back — half in a suit against Title Insurance and Trust, the other half from the government and from Continental Illinois. Also, he feels lucky to have escaped with his skin. “The FBI later found out that this Dr. Rosenova character wasn’ta doctor but a hired killer,” Gagosian says. “If they’d come to Zurich, they could have said, ‘We saw him pass a million dollars,’ and my wife would have thought I’d taken the money and made off with it. But I’d really be at the bottom of the lake in Zurich. In my opinion, that’s what they had in mind.
In early November of 1976, only a week after Leggett’s case was closed, the next player in the saga of the Gagosian house “burst onto the San Diego scene like a Las Vegas chorus line,” to quote the San Diego Union. Richard L. Burns, the owner of R.L. Burns, the owner of R.L. Burns Corporation, announced that he was moving his San Bernardino-based oil, gas, and coal exploration firm to San Diego. The high-rolling Burns, a lanky Air Force veteran described as “accessible, affable, and open” (though repeated attempts to interview him for this story were fruitless), was a high school dropout who liked to be chauffeured about in his Rolls Royce. “The las of the big-time spenders,” as one security analyst called Burns, leased for seven years the eleventh floor of the Mr. A’s building at Fifth and Laurel in Hillcrest for $11,000 a month. Lest anyone fail to get the message, Burns declared that he intended to buy the Gagosian mansion for $1.9 million.
Several months earlier, La Jolla realtor Ralph Dalton had taken Burns and his family to see three homes in San Diego. Dalton knew that Burns had an annual salary of about half a million dollars and that money was no object, so he showed him teh best in town. The first stop was a house in Rancho Santa Fe valued at $1.2 million. The second was the Bob Losing house on Whale Watch Way above La Jolla Shores, the one Saudi Arabian Prince Fahd would buy through Dalton some years later for well over a million dollars. And the third was the Gagosian mansion, with an asking price of $2.2 million. After viewing the home, Dalton accompanied Burns, his wife, and several of his children to the La Jolla Beach and Tennis Club for lunch. It was decided that the family would be democratic and vote to see which house they should buy. The wife and kids voted for the Losing house. Burns admitted he liked that one, but he kind of liked the Gagosian house, too.
Instinct told Dalton that Burns had his mind made up from the beginning to buy the Gagosian mansion. It was said to be the biggest, most expensive, most notorious house in San Diego. The Wall Street Journal had published a cover story about it during the Leggett affair, making it known the world over. This was a superlative house. And Burns chose it for that reason, opting for size over intimacy, excess over taste. “You have to realize,” explains Dalton, “that in the late ’60s Burns started his company with next to nothing. Now, in 1976, he’s worth at least $30 million. Buying that house was an ego trip, just as it was for Earl Gagosian when he built it.
George Coleman, at this time still representing Baltimore Federal, the holder of the title on the house, had little doubt about Burn’s intentions to buy it. Coleman says that before he’d even heard of Burns, he got a long-distance phone call from an attorney for Continental Illinois (the same bank that offered a tremendous credit line to the R.L. Burns Corporation and that issued the Leggett certificate of deposit), who casually mentioned, “Oh, I hear R.L. Burns is going to buy the Gagosian house.”
“Ten minutes later I get a call from some guy [Dalton] who says he wants to show Burns the house,” Coleman recalls. “I think it was all set up ahead of time. You see, as long as the house remained unsold. Continental Illinois was open to more lawsuits. It sounded like they had asked Burns to buy that house in order to get Baltimore Federal off their backs.”
Burns moved into the Gagosian mansion in early 1977 and quickly became a major figure in San Diego, known for his gregariousness (he entertained often at the mansion), his generosity (he donated $20,000 to restore the Spreckels Organ in Balboa Park and pledged $100,000 to the San Diego Community Fund, less than half of which has been received to date), and his eccentricity (the Union reported that one evening in late 1977 Burns bought six junked vehicles and dumped them on a La Jolla beach, claiming he did so to prevent waves from eroding colleague Kenneth Poovey’s oceanfront property at La Jolla Shores). Mayor Pete Wilson and the Chamber of Commerce held a welcoming luncheon for Burns in May of 1977, attended by San Diego’s best. Burns assured everyone that his company’s “inevitable growth and expansion” would benefit all San Diegans.
It didn’t quite work out that way. In March of 1978, one year after his arrival in San Diego, R.L. Burns resigned as chairman of R.L. Burns Corporation, which was bought out by Consolidated Oil and Gas of Denver. Burns sold his 55.3 percent majority holding in the company for $14.6 million, even though the stock market value of his shares was more than $40 million. No one could figure out why he had sold so cheaply. R.L. Burns Corporation shareholders were particularly confused. They found their answer in the coming months, when the R.L. Burns Corporation began announcing drastic losses blamed on a coal miner’s strike. The company lost a staggering $27.8 million in the fiscal year ending in July of 1978. In October of 1978, shareholders filed a class action suit against Burns and his former company, alleging that the company inflated the market price of its stock through misleading statements and nondisclosure. To the stockholders it looked as though Burns had taken the money and run. the company claimed that its former accounting system, since replaced by a better one, led to the inflated market price of the stock.
During this period Burns and his family decided to move out of the Gagosian mansion. They wanted to lead less conspicuous lives than the house allowed. Besides, according to Ralph Dalton, Mrs. Burns had never liked the house. It was so big, and so cold, and there was constant foot traffic around it to and from Black’s Beach. It was like living in a ... in a hotel, for goodness sake. So in mid-1978 Dalton sold Burns the same Rancho Santa Fe home he and his family had looked at two years previously. Burns put the Gagosian mansion up for sale.
Next on the scene was Kevin Rogan, managing director of IFM Funding, a West German holding company that operated Picnic ’N Chicken restaurants. In 1979 IFM leased the house with an option to buy for $4.5 million. At about this same time Burns, still owner of the Gagosian mansion,s tarted a new company called Nucorp Energy, touted by the local papers as the beginning of R.L. Burns’s new “financial empire.” In 1980 the company announced an extremely ambitious oil and gas exploration and development budget of $80 million. The next year it signed a $200 million unsecured revolving credit agreement with Continental Illinois National bank — a surprising loan, considering that Continental Illinois had financed the disastrous investments in coal interests that led to Burns’s departure from the R.L. Burns Corporation just three years before. Time would tell that Continental Illinois was pressing its luck. In May of 1982 Nucorp Energy reported losses of $249 million. In June Burns resigned as chief executive officer and director, and a month later Nucorp Energy filed for bankruptcy under Chapter II. The Wall Street Journal wrote that “Nucorp illustrates the perils of trying to grow rapidly through debt.”
Little is known about Kevin Rogan, who has been out of the country recently and was unavailable for an interview. Rogan lived in the Gagosian mansion for about two years, while it was being leased by IFM, and then moved to the San Francisco Bay area. Nothing suggests that he shared the flamboyance of those who preceded him or that he desired the high-visibility lifestyle the house seems to mandate. Though he threw a few parties and allowed the mansion to be used by charities from time to time, he tried to stay out of the news, often ignoring phone calls from local reporters. Dalton, who met him once, says he was a “nice man, very businesslike.”
In July of 1983 IFM Funding exercised its option to buy the house from Burns for $3.6 million and immediately turned around and sold it for about nine million dollars to Coffee Imports, run by the family of Hojabar Yazdani. Local Iranians say that toward the end of this reign the shah imprisoned Hojabar Yazdani for political reasons, hoping to appease the middle class by jailing a rich and powerful exploiter of the people. After the shah abdicated in January of 1979, Yazdani was still in Gasr prison, the same one that held two American employees of Texas industrialist Ross Perot. In his best-selling book, On Wings of Eagles, Ken Follett describes how a rescue team escorted the Americans out of Iran after a revolutionary mob stormed the prison and liberated its nearly 12,000 inmates. Yazdani would most certainly have been executed by the ayatollah had he not escaped as well.
Interestingly, Yazdani shared with Gagosian and Burns the status of self-made man. Known in Iran as le berger (the shepherd) because he came from a modest sheep-ranching empire and eventually became a powerful business and political figure in Iran. Al Nasir Wissanji, a Pakistani now living in San Diego who grew up in Zaire, was once told by an Iranian diplomat there that although the family was wealthy and prominent, the Yazdanis were vulgar nouveau riches and “not good people to be associated with.”
Yazdani escaped from Iran with much of his fortune safe in Costa Rica. A good part of it, however, has been squandered in San Diego by son Nader, who came here in the mid-’70s to attend United States International University. At USIU, one acquaintance explained, he reveled his way to a B.A., paying people to write his papers and take his exams. He wasted no time positioning himself prominently in La Jolla social circles, driving about in his fancy car, flashing money shamelessly, spending profligately. To the women who hung out at the local bars, Nader was a swarthy Mediterranean dreamboat, a fully equipped man’s man with Italian features, European cloths, a sexy accent, and a bankroll that wouldn’t quit. He was big, brash, and mean, but he could be so tender, so nice, and so ... generous. It didn’t seem to matter to these women that every night he’d go down to Carlos ’n Charlie’s on La Jolla Boulevard and flaunt his rough-tough-and-hard-to-diaper teenage hotshot image, that after beating up some guy, usually a Saudi or a Mexican, he’d take a woman home, bed her, and then discard her like MasterCard carbons.
The Yazdani family, which owned six houses in San Diego at one time, was of the Bahai religion, an offshoot of the Shiah Muslim faith that emphasizes the spiritual unity of man. It was common knowledge among friends that Nader had been expelled from Bahaism (though he has apparently been reinstated). A brother of his died of cardiac arrest, believed to be caused by cocaine. Nader Yazdani, who thought he was on the ayatollah’s hit list, had several bodyguards, mostly muscular blond fellows. One, however, was a mean and beefy 300-pound Costa Rican. “That guy would tear you apart if you even looked cross-eyed at Nader,” says Wissanji, who met Yazdani at USIU and became friendly with him. “One day the Costa Rican was gone and I asked Nader where he went. He said, ‘Oh, I got rid of him. He scared all the girls away.’”
Nader Yazdani lived in the Gagosian mansion from May of 1983 until June of 1984. He agreed to buy the house on May 1, 1983, when Coffee Imports executed an all-inclusive trust deed in favor of IFM Funding for nine million dollars. On July 15, 1983, IFM Funding, using the house (to which it still held title) as security, received the second of two loans totaling four million dollars from Sun Savings and Loan Association. The very next day IFM transferred the home title to Coffee Imports. Under the terms of the deed agreement, Coffee Imports was required to make payments to IFM Funding on both the four million dollars represented by the loan and on an additional five-million-dollar note. Unfortunately, Yazdani never made a single payment to IFM Funding, however, was paying monthly interest of approximately $45,000 on its loans from Sun Savings. After six months of paying money out without taking any in, IFM was forced to stop making these payments, and in late 1983 threatened foreclosure on the house.
During the months that followed, Yazdani scrambled feverishly for money. In March of 1984 he rain into Ralph Dalton (they’d been introduced by Prince Fahd years ago at Carlos ’n Charlie’s, a La Jolla nightclub frequented by foreign students at USIU) and asked him for help in refinancing the house. “I didn’t know at that time that Nader hadn’t made any payments, so I said sure,” Dalton explains. “Then we sat down with a lender and Nader starts telling him all kinds of things, that he had a big income, for example. All kinds of lies. Nader had made out a financial statement to show his worth, which he said was $300 million. His father was one of the major coffee plantation owners in the world, but Nader couldn’t substantiate any income. Nobody believed the financial statements.”
And no one would lend him money. Parked in the garage at the mansion were a new Rolls Royce, a Ferrari, a Mercedes 600 limousine, a Mercedes 500 SL coupe, an Oldsmobile, a Porsche, and a token Toyota. According to Dalton, Yazdani owed money on all the cars as well. “I remember I’d be sitting in his office at the house and he’d be talking to bankers,” recalls Dalton. “They’d be asking for their money and Nader would say, ‘Oh yeah, I’ll send you $10,000 right away,’ but he’d never send it.”
In desperation, Yazdani began borrowing from wealthy Iranians here and in Los Angeles. Dalton recalls on several occasions seeing checks for as much as $40,000 lying around Yazdani’s office and house. The young Iranian had a vast collection of Persian rugs and was trying to borrow money against them. One day he came to Dalton frantic, saying, “Ralph, I’ve got to have $100,000 tomorrow! If you get it for me I’ll give you half.” But even in times of desperation one must have fun. In the midst of this turmoil, Yazdani held a party at the Gagosian mansion attended by 400 people. The host picked up the tab for the food and the booze.
Yazdani’s final weeks in the Gagosian mansion seemed to Ralph Dalton like “the last days of Pompeii.” Although for most of the year he lived there Yazdani paid the $6500 a month it took to cover the utilities and maintenance on the house, at the end even his petty cash flow had dried up. The Costa Rican maids, who’d been flown up and paid $200 a month, were now gone and the house was dirty. Dalton recalls shooting pool there with broken cues. Yazdani offered to let Dalton play tennis at the house, but the huge Newfoundland dogs guarding the estate had left enormous amounts of excrement all over the courts, making them unplayable. Several of the many phone lines were disconnected. And one day Dalton drove up and saw a sign on the main gate announcing that the water was going to be shut off. “It was pretty ironic,” Dalton says, “to see that people living ina house appraised at $20 million hadn’t paid their water bill.”
But Yazdani had one last trick up his sleeve. One day he called Dalton (who was a stockbroker before becoming a realtor) and said he had several hundred thousand shares of stock in a number of different companies. He claimed that with these stocks, along with some others, he had a total of about $10 million. “he said he’d had these stocks all along and asked me to see if he could borrow money against them,” says Dalton, who was still unaware that Yazdani had never made a payment on the house. “I called a friend at a securities house and it turned out there was no market for them at all. They were Salt Lake City stocks from ‘shell’ companies, which are often used as vehicles for unscrupulous stock promoters. Nader tried to get [Kevin] Rogan to accept them as payment for what he currently owed on the house. Rogan and his lawyer, Jim Rhode, actually came down here from San Rafael to look at them. But Rhode’s a smart man, and he said no.”
In fact, Yazdani hadn’t had the stocks all along, as he’d told Dalton. He’d just recently flown to Salt Lake City and bought them from some flashy financiers using certificates of deposit from a Costa Rican bank controlled by his father, Hojabar Yazdani. According to Al Nasir Wissanji, this deal was executed late on a Friday and Yazdani was long gone on Monday morning when the sellers discovered that the certificates were no good. Yazdani, in effect, had swindled them. “These people in Salt Lake City are not guys you want to mess with,” says Dalton with a worried frown. “They were looking for Nader. They wanted their money back.”
Numerous state (Utah) and federal regulatory agencies were also looking for Yazdani, but before anyone caught him he’d skipped the country, leaving considerable wreckage behind him. In late June of 1984, IFM Funding foreclosed on the house and reacquired the title from Yazdani’s Coffee Imports. Rogan’s company, apparently in financial trouble, immediately filed for bankruptcy in order to protect is investment (as long as the case is in bankruptcy court, Sun Savings cannot seize the house), Picnic ’N Chicken restaurants, seventeen of them in San Diego alone, were out of business. Sun Savings has been the biggest loser. The foreclosure on teh Gagosian house, along with a series of transacions involving other properties owned by the Yazdani family, has left the S&L with $5.3 million in defaulted loans. The defaulted loans didn’t necessarily result in but no doubt contributed to Dan Dierdorff’s resignation last fall as Sun Savings’s chief executive officer. In November of 1983, Dierdorff purchased a La Jolla Farms house from Hojabar Yazdani (with Nader representing his father) at 9660 Blackgold Road for $750,000, a price many felt was well below market value. Dierdorff recently put the same house on sale for $1.65 million. Dierdorff is being investigated by S&L regulators for possible “conflict of interest” concerning his favorable purchase of the Blackgold Road home and generous (defaulted) loans made to the Yazdani family. The carnage suffered by the Yazdani flock appears far from over. In recent months, four other members of the family, owners of numerous posh homes around San Diego, have filed for bankruptcy.
The effect of its turbulent past has had little effect on the Gagosian mansion itself. Sort of like a neutron bomb, history has been kinder to the structure than to the people who lived in it. Today it stands empty except for the presence of live-in caretakers, but those who knew the house during the Gagosian years say little has changed. The carpeting, the bar stools, the dining set, the sofas, the chandeliers, the royal gold of the master bedroom, the lurid pink of the ladies’ suite — all original installation, are still there. “That’s always amazed me,” says Ralph Dalton. “Every person I’ve ever taken to see the house has said the first thing they would do is redecorate it. Certainly Burns and Rogan had the money to do so, yet no one ever has.”
Perhaps the next buyer will put his mark on the house, rather than be marked by it. In all fairness, none of the Gagosian mansion inhabitants will likely suffer permanent scars. Earl Gagosian, who now lives in La Jolla Shores, runs every morning on the beach at 4:30, has taken up skiing, and is enthusiastically teaching his son how to build hotels. R.L. Burns runs a high-tech manufacturing firm here in Miramar called Deposition Technology. Kevin Rogan is occupied trying to keep the house in bankruptcy court long enough to sell it. When he does, he stands to make a handsome profit, even though the asking price has dropped from $13.5 million to $10.1 million and now to $8.6 million. Nader Yazdani, still in his late twenties, is sipping coffee on his father’s fortressed estate in Costa Rica.
The Leggetts are reportedly living in Phoenix. Lisa Weinberg appears in La Jolla from time to time, and Judge O’Neill claims he spotted his old friend Charlie Leggett in Pacific Beach 18 months ago. No one has word of Huckleberry. “He was a nice old dog if you were introduced to him right,” says George Colemna, challenging the muth of his ferocity. “But Jesus, did he have a bark. He was a con artist just like Leggett was.”