By Sally Koris
Updated May 04, 1981 12:00 PM

Even in Beverly Hills, that mecca of conspicuous consumption, Saudi Sheik Mohammad Al-Fassi’s pea-green, $7 million mansion on Sunset Boulevard was a marvel of garishness. So when fire struck the manse on New Year’s Day 1980, well-dressed crowds of gleeful gawkers chanted “Burn, burn, burn.” The fire was labeled suspicious even before investigators discovered that some of the sheik’s eclectic art collection was missing from the rubble. While attempting to solve the case (no one is currently booked for arson), the L.A. police broke an alleged art-theft-and-insurance-fraud scheme. Among those charged: Al-Fassi’s former chauffeur; the son of a prominent L.A. gallery owner; and Dr. Kurt Wagner, 46, a celebrated Beverly Hills plastic surgeon.

As police tell the story, Wagner and his wife, Kathleen, were escorted on a 1979 tour of the controversial mansion while the sheik was away by the chauffeur, Michael Ivan Luterlof, who then allowed them to pick out the objects they wanted. In exchange for these, police claim, Luterlof asked the virtuoso surgeon to completely redo his face. Police began to suspect Dr. Wagner only after he reported that his home had been burglarized in March 1980. He collected $178,000 in insurance, but subsequently an ivory pagoda listed as missing turned up at L.A.’s Krone Gallery. When police called on Wagner to tell him the item had been recovered, they recognized some of the sheik’s possessions in his home. Then an anonymous witness helped tie Wagner and the chauffeur together. Ultimately named in the art-theft-and-fencing operation were the Wagners, Luterlof and Neal Krone, the son of the gallery proprietor. Specifically, a complaint has been filed alleging that the surgeon conspired to commit insurance fraud.

The arrests triggered disbelief in the high-society circles in which all the defendants but Luterlof travel. “The police are in way over their heads on this case,” snipped the lawyer representing Krone. “You can’t expect a bunch of semiliterate police officers to understand anything about fine art.” (It should be noted, however, that some of the doctor’s works involved were forgeries.)

Dr. Wagner, who faces a preliminary hearing May 12, does seem an unlikely master crook. A Hollywood personage and talk show regular, he performs up to 30 operations per week at fees averaging $500 an hour. In the process, Wagner has shocked more staid medical colleagues with his gaudy lifestyle, and by appearing in the OR in red shoes and a surgical smock with “Mickey Mouse Productions” printed on the pocket. His most bragged-about case may have been the “remaking” of his wife of 14 years. Kathleen had him enlarge her breasts and re-sculpt her face, pin back her ears and lift her buttocks and thighs.

Wagner has attributed his admittedly “somewhat ostentatious” activities to reaction to an unhappy Brooklyn childhood as the son of a Viennese-born psychiatrist. Unable to defend himself against neighborhood bullies with his fists, Wagner learned to rely on his mind and his mouth. “My attitude became, in effect, ‘Hey, look at me, listen to me, I’m Kurt Wagner and I know a helluva lot more than anybody else around here.’ Those were very formative years,” he once explained, “and that’s the way my personality took shape. I was noisy, irrepressible, combative, competitive.” And a great self-promoter. “You’ve heard of Superman? I was Supermouth,” he boasted. “Always talking, always showing off, always the clown. If Kathy and I went to a dinner party, I considered the evening a failure unless I told the most jokes. The other guests needed protection from my loud sense of humor.”

A fellow surgeon describes Wagner as “a flamboyant character. He’s had a meteoric rise to success based on two factors: His results are good and he’s been able to publicize himself.” Today, though, Wagner is avoiding notoriety as assiduously as he once courted it. When reporters pressed him for his side of the story, the erstwhile supermouth responded: “The only comment I can make is that you’ll have to talk with my attorney.” The $500-an-hour surgeon could face up to six years in prison.