The mystery man and his flying machines

Proquest LLC

By Elisabeth Hulette

The Virginian-Pilot

VIRGINIA BEACH

There's an Enigma in Wolfgang Gerald Yagen's office.

It looks like a typewriter. If you pressed the lettered keys, it would probably sound like a typewriter. But like Yagen himself, there's more going on.

The machine was used by Nazis during World War II to transmit secrets. When an operator typed a message, the Enigma spit out a coded version that could be transmitted by Morse code but understood only by someone with one of the machines.

Yagen has two Enigmas, which routinely fetch five figures at auctions. He keeps one in the Virginia Beach office of his for- profit colleges and one in the Military Aviation Museum in Pungo, where he keeps his World War I and World War II airplanes.

He's made millions with the colleges and won a worldwide following with the museum.

But in June, he announced that, because of financial troubles he wouldn't discuss, all of it - the colleges, the museum and the air shows that regularly launch his planes into the skies over Virginia Beach - could go away.

What went wrong?

To understand, you have to know Jerry Yagen - a man as difficult to decode as his Enigmas, and consumed by an -unusual obsession.

He sank his savings into the museum and has been heavily subsidizing it for years. When he thought he couldn't keep it going this summer, he sold a dozen of his airplanes. He said it was like selling his children.

And according to a lawsuit filed by a competitor who was hoping to acquire his schools, his businesses have been struggling to stay afloat, plagued by bad record-keeping and a lack of compliance with the rules that govern for-profit colleges.

In the thick of negotiations to sell his schools to Spartan College in Oklahoma, the lawsuit says, he threatened to shut down and leave thousands of students stranded - including those at his colleges in Hampton Roads.

Yagen adamantly denies the claims and says, through his lawyers, he would never strand a single student. He said the lawsuit will be dismissed. The colleges are profitable, he said in December, and the museum isn't going anywhere.

"It's not," he said, "because Jerry Yagen is writing those checks."

There's a lot Yagen will do to keep his airplanes, keep them flying, and keep them in Virginia Beach.

In 1969, when Yagen was 23, he quit his first job.

He had studied business at Virginia Tech and had been hired to work for a headhunting agency. After six months, he decided he could do it better.

Starting with a phone in his mother's spare bedroom, Yagen grew his company, Search and Recruit International, into a dozen offices across the country and specialized in finding jobs for soldiers returning from Vietnam.

Employers saw only the soldiers' experience carrying guns in the jungle, Yagen said, but his company figured out that a guy who worked on missile systems could be a technician. A guy who worked on a nuclear submarine could work in a nuclear power plant. Yagen's offices began appearing in towns with submarine bases.

A combination of rising unemployment rates and the nuclear disaster at Three Mile Island in 1979 eventually put an end to the agency, he said. But another opportunity popped up. The city of Norfolk saw Yagen's success with veterans and paid him to train them as digital technicians. By the time Norfolk pulled the plug, Yagen had developed a slate of courses. He opened them up to the public as the Electronic Institute of Technology.

Eventually, people Yagen hired urged him to get the school accredited and approved for the government's student loans, and to target women with nursing programs and a name that didn't limit the school to a male-dominated field: Centura College.

The schools grew from there. Today, his 20 or so campuses across the country - under the names Centura, Tidewater Tech and the Aviation Institute of Maintenance - train people to be nurses, welders, heating and air-conditioning technicians and airplane mechanics.

Yagen's field is controversial. For-profit colleges have expanded tremendously in the past decade, but they've also come under heavy scrutiny. Critics say they sell expensive programs that don't deliver employment and rake in money from government student loans to do it.

In response, industry leaders say they reach out to students who are ignored by the rest of higher education, offering the late- night and online courses needed by people who are working and raising families.

For Yagen, the enterprise has been extremely profitable. Once, he collected stamps and comic books. Later, he collected Ferraris.

Then, one year, he and his wife, Elaine, went to a World War II- themed dance in an airplane hangar. Yagen wore the uniform of a young man who had fought in the war. Elaine said it seemed like the spirit of that man got into him.

Yagen began searching for a vintage airplane of his own. He picked up a Curtiss P-40 fighter that had wrecked north of the Arctic Circle in Russia and sent it to New Zealand for restoration. Around the same time, he bought a Corsair fighter, then a Stearman trainer so he could learn to fly the tail-wheel fighters.

With the colleges expanding each year, he had the means to start his own vintage airplane collection. But no one predicted the way it would take off.

"He's constantly busy. He always has an idea for something," Elaine Yagen said of her husband. "And once he decides he's going to do something, he does it."

In October, a man came from England to see Yagen's Spitfire.

During World War II, George Silvester flew that very plane over the Balkans. Decades later, his son tracked it down.

On a cool fall day, Simon Silvester sat in the Spitfire's cockpit. Years ago, it had been reduced to little more than a shell, and children in Tel Aviv, Israel, had used it as a playground. Now, it was restored to flight condition.

Silvester imagined his father, not even 25 years old, bombing railways and trains. The Spitfire seemed fragile and complicated, dwarfed by other airplanes from the same time, Silvester said. Yet his father not only survived in that airplane, he helped fly England to victory.

"It was a completely remarkable and amazing experience for me," Silvester said. "To sit where my father sat, practically 70 years ago, is really quite something."

Such stories abound at the Military Aviation Museum. Yagen knows them all.

There's his Mosquito, very light and fast, made of wood and dubbed by some "the plane that saved Britain." For years, it rotted outside farms in northwestern Canada until Yagen picked it up for $30,000, spent $4.5 million on restoration and turned it into the only Mosquito in the world that flies. Recently, Yagen said, a man offered him $9.5 million for it. Yagen turned him down.

There's the TBM Avenger, the same kind of torpedo bomber former President George H.W. Bush was flying when he was shot down over the Pacific during World War II. When an aircraft carrier named for Bush was christened in 2006, Yagen's plane flew over the ceremony.

A few years back, Yagen brought over a German airplane hangar riddled with holes from Russian bullets. During the restoration, a worker removing lead paint from the hangar's frame called him.

"Can you come down here right now?" he asked Yagen.

He had found an inscription, rough letters forced into the steel: a name, Oct. 14, 1944, and the words "He worked here" in Polish.

"What was a Polish worker doing here? What was he doing inside an air base in the German Luftwaffe? In a factory? He was a slave laborer," Yagen said.

The museum's seven buildings hold 60 to 65 airplanes, plus shelves piled high with rare, dusty parts. Yagen has other planes, too, in repair shops and air fields around the world. He said he's bought at least three museums overseas and kept the contents.

There are larger collections of vintage aircraft elsewhere, like that of the Smithsonian National Air and Space Museum, but Yagen is quick to point out those planes don't fly. His do, circling the skies over Pungo during air shows several times a year.

It's expensive. The cost of fuel, insurance and repairs is substantial, not to mention training pilots at a time when fewer and fewer from the wars are left. Air shows and other events don't provide enough money for the museum to break even. Yagen fills the gap, spending millions of dollars over the years.

For him, it's worth it. And other people are awfully glad he feels that way. Chris Henry, membership services representative at the Experimental Aircraft Association in Wisconsin, said the flying itself is a piece of history. It's not easy to imagine what it was like to fly in the world wars, back when airplanes were new and experimental, he said.

"You get out there and see it run and see it fly, and it gives you a whole new appreciation for what those guys did," Henry said.

George Kickhofel, a docent at the museum, calls a balcony overlooking part of the World War II collection his "office."

For 25 years, including during the Vietnam War, he flew airplanes for the Navy. He said he loves to see visitors' reactions to the museum, how excited people get when they see the airplanes. When he heard over the summer that the planes might be sold, he was heartbroken.

Gazing down from his balcony on a warm day in October, he wondered aloud, "Is this thing I love going away?"

Yagen won't say much about his colleges, and he declined to let a reporter visit them. But according to a lawsuit filed by Spartan SP Investor LLC, Yagen's museum was taking off just as his business was falling apart.

The lawsuit, filed in Chicago, says that in May, Yagen asked Spartan College of Aeronautics and Technology and Sterling Partners, the private equity firm that owns Spartan, to buy his schools. He was running out of cash, and he knew Spartan - a single campus in Oklahoma - had the resources and interest to buy, according to the lawsuit.

Spartan College claims it looked into Yagen's colleges and found a slew of financial and regulatory problems. They weren't complying with changes in higher-education laws, they were misrepresenting job- placement numbers, and four Centura campuses were in danger of losing their accreditation, the lawsuit says.

Experienced professionals working for Spartan "had never seen such a poorly and irresponsibly run organization, or one with such serious regulatory compliance problems," the lawsuit says.

Spartan claims it hired two accounting firms and a turnaround consultant and spent $1 million devising a plan they say fixed the schools. If they hadn't moved quickly, the lawsuit says, the business would have gone under.

Yagen seemed more interested in money for airplanes than in saving his schools, the lawsuit says.

The two sides signed an agreement pledging to negotiate in good faith to buy and sell most of the schools. But then Yagen didn't sell.

Yagen's side tells a different story. In an email, his lawyers said that like many other colleges across the United States, his were experiencing a temporary cash-flow problem caused by a regulatory change from the U.S. Department of Education. He approached Spartan to protect his students and his investment, but he never had the kind of financial and compliance problems alleged in the lawsuit.

Further, the lawyers wrote, Spartan may have spent money on Yagen's schools, but only to "help Spartan buy the schools at the lowest price possible." The schools worked their own way out of their cash-flow problem. Yagen did negotiate in good faith, they said, but then Sterling started making unreasonable demands.

Yagen said the case is ridiculous and Spartan is just trying to coerce him. The college is asking for more than $20 million.

"Don't believe everything you read in a lawsuit," Yagen said.

Yagen's schools had had problems before. In 2010, Tidewater Tech in Norfolk had two-year loan default rates of more than 25 percent for three years straight, endangering its ability to give government loans. But the school, which trains students in welding and car repair, successfully appealed, arguing it serves a difficult population of students from poor families.

Yagen complained about another law, which says only 90 percent of a trade school's funding can come from government loans. The rest - Yagen refers to it as roughly $3,000 per student - has to be paid in cash, which he says is difficult because many are young with no income, savings or family support.

For a while, he gave his students small loans to cover the 10 percent. Students didn't always pay back the loans, so they became almost like scholarships, he said. Then, he said, he was told to stop, forcing his schools to collect the 10 percent directly from students. He's since found a lender in California willing to give students loans, but at interest rates as high as a credit card's.

"We're putting students in debt that we don't want to put in debt," he said.

But if his schools aren't profitable, he could lose the museum.

One warm Saturday, Yagen flew his yellow Stearman biplane, made of wood and fabric and used to train pilots during World War II, up Sandbridge Beach. He flew about 100 feet above the water, low enough to see beachgoers stand and stare, to see parents grab their children and point to the sky.

This is what it's like to be Jerry Yagen. No wonder he's become obsessed with these airplanes.

Yagen's license plate reads "SEARCH," and museum Director David Hunt said that's what drives him. It's the search for another airplane, another artifact, another story.

"It's trying to do the impossible," Hunt said. "To get the last one, the last piece. To make the picture complete."

With his crisis from the summer seemingly averted, Yagen is back to full throttle. He's opening a new aviation maintenance school overseas and has bought more airplanes. He says his schools are profitable, debt-free and secure. Whatever happens with the lawsuit, which is pending, won't affect the museum, he said.

But that doesn't mean nothing will change. As he often says, he's 68 years old and can't keep his museum going forever. Neither of his children - his son is a computer specialist, and his daughter works in the restaurant business - are interested in taking it over.

In the next few years, he could hand off the collection to someone else, someone with the means and the interest to keep the planes flying, and keep them in Virginia Beach. But what are the odds of finding another Jerry Yagen?

The city could take over the museum, possibly the same way it pays for employees and buildings for the Virginia Aquarium & Marine Science Center. Yagen had hoped the city might be interested, but a spokesman said officials have ruled it too expensive, and City Councilwoman Barbara Henley, who represents Pungo, said she worries about the liability of flying antique airplanes over homes.

Or the museum could become static, like the Smithsonian. If the airplanes don't fly - or if only a few fly, and not very often - Hunt says, the museum can support itself.

But Yagen doesn't want his airplanes confined to the ground.

"I would like to have the museum be my legacy," he said. "I would like that museum to be here 10, 20 years from now. I'd like for little kids to walk in there and see the airplanes and be amazed that in the middle of the last half of the last century, these types of airplanes flew over the skies of Virginia Beach. And old men will say, 'I remember when those airplanes flew in Virginia Beach.' "

Someday, Yagen will have to slow down. Someday, he'll have to hand off his colleges. Someday, the balance he's struck to finance his airplanes will falter or change, and something will have to give.

But that day isn't today.

Elisabeth Hulette, 757-222-5097,

[email protected]

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historic planes that fly

The air museum in Pungo holds about 60 airplanes. For a list, see page 10

online

You can learn more about Yagen's collection at PilotOnline.com.

1. Bleriot XI

2. Wright Brothers Model EX

3. I Curtiss 1911 Model D "Pusher"

4. Avro 504K

5. Curtiss JN "Jenny"

6. Sopwith "1 1/2 Strutter"

7. Nieuport 11

8. Sopwith "Pup"

9. Nieuport 17

10. S.P.A.D. S.XIII

11. Albatros D.Va

12. Fokker Dr.I

13. Halberstadt CL.IV

14. Fokker D.VII

15. Fokker C.I

16. Fokker D.VI

17. Fokker D.VIII

18. Polikarpov Po-2 "Mule"

19. Polikarpov I-15bis

20. Polikarpov I-16 "Rata"

21. Polikarpov I-153 "Chaika"

22. Messerschmidt (Nord) 108 "Taifun"

23. Fairchild PT-19

24. Bcker B-133C "Jungmeister"

25. Focke Wulf FW-44J

26. Boeing P-26D "Peashooter"

27. WACO YMF-5

28. de Havilland DH-82A "Tiger Moth"

29. de Havilland DH-89 "Dragon Rapide"

30. Stearman N2S-3 "Kaydet"

31. N.A.F. N3N-3 "Canary"

32. Hawker Hurricane Mk XIIB

33. Supermarine Spitfire Mk IXe

34. Mikoyan-Gurevich (Mig) 3

35. North American SNJ-2

36. Stinson L5-E "Sentinel"

37. Laister-Kauffman TG-4A

38. Junkers Ju-52/3m "Tante Ju"

39. Consolidated PBY-5A "Catalina"

40. General Motors TBM-3E "Avenger"

41. North American B-25J "Mitchell"

42. General Motors FM-2 "Wildcat"

43. Curtiss - Wright P-40E "Warhawk"

44. Goodyear FG-1D "Corsair"

45. Yakovlev Yak-3M "Max"

46. North American P-51D "Mustang"

47. Bell P-63 "Kingcobra"

48. de Havilland DH.98 "Mosquito"

49. Focke Wulf FW-190 A8

50. Focke Wulf FW-190D

51. Messerschmidt Me-262

52. Lavochkin La-9 "Fritz"

53. Douglas AD-4 "Skyraider"

54. de Havilland DHC-1 "Chipmunk"

55. Beechcraft T-34B "Mentor"

56. North American T-28D "Trojan"

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