Lobdell: Wagner can't be topped

December 13, 2010

I usually think about Stephen Wagner — Newport-Mesa's most accomplished embezzler of public money — only when I happen to pass by his former upscale home in Newport Beach's Dover Shores neighborhood.

My stream of consciousness goes something like this: mink-lined tuxedo, Rolls Royce, the island of Nevis. What a sad, tortured and short life.

Last week, a house wasn't needed to trigger thoughts of Wagner. He immediately came to mind when the news broke that Jeffrey Hubbard, superintendent of the Newport-Mesa Unified School District, had been charged with two felony counts of misappropriating public funds.


The alleged crimes took place while Hubbard, who was hired by Newport-Mesa in 2006, was superintendent of the Beverly Hills Unified School District. He has denied any wrongdoing.

If prosecutors are to be believed, the money was funneled to a former facilities director at the Beverly Hills school district over four years.

However these allegations unfold, it's doubtful that the melodrama of Wagner's embezzlement, which took place in the late '80s and early '90s, will be surpassed.

Wagner, who was 40 went he was arrested in 1992, had risen through the school district's ranks, starting as a bookkeeper and ending up as its chief financial officer.

"He was a young man of promise," said then Supt. John W. Nicoll, who has died in 2006. "It's part of my job to identify leaders and managers, and I have been keeping my eye on him for years."

Somewhere along the way, Wagner figured out a way to write cashier's checks to himself from a health insurance account that everyone thought had been closed. The cashier's checks meant the auditors had no paper trail of the crime.

He had earned enough trust that he operated with little oversight, allowing him to replenish the secret account with school funds without detection. He was finally caught when a fellow employee grew suspicious and alerted authorities. Wagner had also grown a little sloppy, writing large school district checks to a shoe repair business he co-owned.

In the end, the school district credited Wagner with stealing more than $3.7 million from taxpayers over a half-dozen years. I've heard from several insiders over the years that the actual figure was much higher — double or triple the amount — but a real total was nearly impossible to calculate because Wagner had covered his tracks so well. Even at $3.7 million, it was the largest embezzlement of a school district in state history.

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