Armitage investigation widens

The investigation into embattled Santa Rosa investment adviser Gary Armitage is widening as complaints against him and his associates have swelled to more than 700.

In addition, Armitage is selling his luxury hillside home in Healdsburg as well as a neighboring property owned by his daughter.

"They are getting out," said Theresa Teuma, a listing agent with Legend Real Estate. "With all of their legal problems, they are getting rid of them."

Last month, Armitage put his 5,000-square-foot home on Wild Horse Court up for sale at $2.5 million. A neighboring 3,600-square-foot home that Armitage deeded to his daughter in 2001 is also for sale, listed last month for $1 million.

Armitage's company, AGA Financial, is under investigation by the state Attorney General's Office following fraud allegations by investors against him and a related Redding firm called Asset Real Estate and Investment Co.

Investors, many of whom are senior citizens who lost their life savings, claim Armitage and partner Jeff Guidi steered them into high-risk investments, charged excessive fees and secretly benefited from the transactions they brokered.

They also claim Armitage and Guidi knew or should have known that the man putting together the deals, AREI chief executive James Koenig, was a convicted felon who served time in federal prison for defrauding investors in a gold scam in the 1980s.

The state investigation, which became public when Department of Justice agents raided AREI offices in June, has since ballooned into one of the largest and most complex financial fraud investigations in the state's recent history.

"So far, over 700 individuals claim to be affected by this," said Dana Simas, spokeswoman for the state Attorney General's Office. "That's a low estimate. It's obviously growing."

Other agencies may be getting involved, as well.

An investigator from the U.S. Securities and Exchange Commission has requested information about the case with an eye toward interstate financial transactions, according to one person who provided communications with an SEC official.

Investors from as far away as Arizona, Hawaii and Tokyo have contacted The Press Democrat to report the failure of investments sold to them by AGA Financial. The firm was founded in 1994 and had an office in Santa Rosa until it closed in September.

An SEC spokesperson said the agency could neither confirm nor deny an investigation.

Simas said she is aware some investors have complained to the SEC but could not say what, if anything, the federal agency is doing in connection with the case.

The sale of the two homes may be of interest to investors, several of whom are suing Armitage and Guidi personally to recover some of their losses.

The listing for Armitage's five-bedroom, four-bath home describes it as "exceptional in every way," including "exquisite formal dining room, soaring beamed ceilings, incredible fine art chandeliers, copper surround fireplace" and a "dramatic rock pool."

The listing for his daughter's home is more modest, referencing its "soaring ceilings, wonderful formal living room," "romantic master suite with sitting area, private deck" and three-car garage.

Teuma said the homes were "beautiful" and "underpriced."

Another home owned by Armitage, an estate in the mountains outside Redding called Brigadoon Castle, has not been listed for sale.

The 58-year-old Healdsburg native could not be reached for comment.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.