Wiped-out investors left looking at castle

Former clients of embattled Santa Rosa financial adviser Gary Armitage are getting ready to storm the castle -- literally.

As they fume over their own ruined portfolios, anguished investors are following a tangled paper trail in a hunt for Armitage's assets.

Some are appalled by what they have found.

In addition to a luxurious home in Healdsburg, land records show Armitage and his wife, Nell, own a castle on an 80-acre estate in the mountains west of Redding.

"No wonder he pushed us into these sorrowful investments," lamented Paul Scheckler, a Danville resident who invested $750,000 through Armitage. "I guess he needed the money to carry on his lavish lifestyle."

Armitage has turned Brigadoon Castle, a former B&B near the hamlet of Igo, into a private retreat.

Located several miles up the narrow, winding Zogg Mine Road, the home was built in 1982 by a Redding physician. The main residence is complete with an ivy-covered turret, a great room with 30-foot high ceilings, hand-carved spiral staircases, stained glass windows and bathrooms bathed in Italian marble, according to descriptions of the property from travel guides.

A separate two-story cottage sits beside a trout pond.

Land records show that Armitage and his wife own a 75 percent stake in the property. Former innkeeper Geri MacCallum, who ran the castle when it operated as a $265-a-night bed-and-breakfast, owns the remaining 25 percent.

Armitage was the designated representative of Brigadoon Castle LLC, which acquired an ownership stake in the castle in 2000, according to land records. The limited liability corporation transferred its stake in the castle to Armitage and his wife in 2005.

In a brief interview, MacCallum said she still considers the castle she purchased in 1996 to be hers, although she did not dispute the documents listing the Armitages as majority owners.

"As far as Gary and Nell and I are concerned, this is my castle," MacCallum said. "They are my friends."

MacCallum explained that she was "in a financial bind" and Armitage "came to my aid." She declined to discuss the arrangement further.

Armitage could not be reached for comment.

Armitage shut down his Santa Rosa financial services firm, AGA Financial, last month after at least a dozen lawsuits filed in Sonoma, Marin and Shasta counties claimed he helped orchestrate an elaborate scheme to defraud investors.

Other investors are eager to learn what assets Armitage may own because many are consulting with attorneys on ways to recoup their losses.

There may not be much left for them to recover in civil court, Santa Rosa attorney Jeff Terry said. He has reviewed Armitage's assets, including the castle, and said that for the most part they are ridden with debt.

"It looks like he's been using his money to live high on the hog," Terry said. "I haven't seen any indication he's got a lot to work with."

Land records show Armitage has refinanced his Healdsburg home several times, and now has a $1.6 million mortgage on the property. It was assessed at $1.2 million in 2007, records show.

How much he owes on the castle is less clear because of the joint ownership arrangement, but records show the Armitages had a $490,000 loan on the property in 2006. The property was assessed in 2007 at $1.5 million, records show.

Investors are also searching for assets held by Jeff Guidi, Armitage's former partner, who is the subject of several investor lawsuits. Guidi owns a home in Santa Rosa and about 300 acres of property in Napa and Yolo counties, records show.

"The biggest fear is that there are not enough assets out to there to satisfy all of the investors," Terry said.

The lawsuits against Armitage and Guidi already in the pipeline could make it even more difficult for investors facing losses to recover anything, Terry said.

Generally speaking, civil court judgments are attached to assets on a first-come, first-served basis, Terry said.

That strikes Jill Doire as unfair. Her mother, Anita Thrall, is 70 years old and has worked at Healdsburg District Hospital for 42 years. Thrall was planning to retire in July, but she's had to continue working since her $150,000 investment with Armitage has evaporated.

Doire, who now lives in Dallas, said her mother doesn't have enough money to hire her own attorney. She thinks there ought to be a way -- such as a class-action suit -- to treat all victims equally.

"Just because they have money doesn't mean only they should get their money back," Doire said.

Terry said he is not aware of any class-action suits against Armitage. He said he's not surprised to hear investors are finding few options to recover their money.

"That's what happens in the classic Ponzi scheme," Terry said. "The last group of investors are left holding the bag."