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In October, 1986, a well-known Los Angeles travel agency suddenly closed its doors, and the

mystery is only now starting to unravel.

It is a tale of intrigue worthy of "Dallas," featuring a wealthy entrepreneur, a bitter divorce and a

costly feud over a family business empire.

At its center is Arnold Walter Rognlien. Although he is unknown to most Southern Californians,

thousands of them bought airline tickets or vacation cruises through his Cardillo Travel Systems,

based in Culver City and once among the nation's largest travel agencies.

A wealthy auto parts salesman who enjoyed travel, Rognlien acquired Cardillo in 1956. As the

agency grew, it served as the centerpiece of a mini-conglomerate that included a fast-food

restaurant chain, an ice drink confection company and an auto parts distributorship.

Rognlien quietly ruled it all until Cardillo somehow ran out of money. Now, much of his empire

is gone or in shambles.

The collapse still amazes those who worked alongside Rognlien for the past two decades. "It was

a family company. I never thought it, or the family, would break apart the way it did," said Larry

F. Sternberg, a former executive and one of Rognlien's closest advisers for nearly 30 years.

At an age when many men work on their golf swing, Rognlien, 75, now works at defending

himself. He faces misdemeanor charges for allegedly not paying 27 Cardillo employees during the

travel agency's last months. The Securities and Exchange Commission has filed a civil suit that
accuses Rognlien and his wife, Esther I. Lawrence, Cardillo's ex-president, of falsifying the

agency's books to show a profit. The Rognliens deny any wrongdoing.

What's more, Cardillo's bankruptcy trustee, Los Angeles lawyer Richard M. Pachulski, is disputing

the shift by Cardillo of its most valuable asset, a $827,436 note, to Rognlien's private holding

company. Rognlien has been ordered by the court to turn over Cardillo's books to the bankruptcy


Esther and Walter Rognlien and his son, David Rognlien, didn't respond to repeated requests for

an interview for this story. Walter's ex-wife Adele and their other son, Bruce W. Rognlien, declined

to be interviewed.

Rognlien's empire began as an auto parts distributorship known as A. Walt Runglin Co., using the

phonetic spelling of his name. He opened the business at age 33 with little cash, essentially "out

of a suitcase," he testified in court years later.

He worked hard and loved to entertain his customers. The son of an Iowa preacher, he quoted the

Bible during business meetings. More often than not, a business dinner at the family home in the

La Canada Flintridge area ended in song, former associates say, with Rognlien leading the chorus

in a deep baritone.

Yet the mercurial businessman is said to be as harsh as he is charming; around the company

headquarters, his tongue-lashings were legendary. Former employees recall that a small matter,

such as a lost memo, could provoke angry outbursts from Rognlien. Often, Rognlien later

apologized for losing his temper. William Kaye, a former Cardillo chief financial officer, says

Rognlien gave him a $100 bill to celebrate Kaye's wedding anniversary after one tirade.
"The man was a paradox," said Richard Churchill, a longtime adviser who was close to the

Rognlien family.

1981 a Watershed Year

By 1981, Rognlien's company had become the largest auto parts distributor in the West, earning a

profit of $300,000 that year, according to Sternberg. With such profits, Rognlien financed other

ventures. Besides Cardillo, he founded Cozy Nook, a small fast-food chain on the West Coast, and

acquired Icee USA, a shaved ice and syrup soft drink company with outlets in K mart and other

stores. He managed them all through his private holding company, known as Runglin Co.

Rognlien's business empire appears to have reached its zenith in 1981--the year Cardillo sold

49.9% of its stock to the public. The Rognlien enterprises posted total sales of $15 million that

year, according to Sternberg. And as his businesses grew, so did Rognlien's wealth. Court

documents show that he was worth $8.5 million in 1982 and owned three homes, including an

$850,000 penthouse in Santa Monica.

His success wasn't unblemished, however; during the 1960s, he closed a chain of money-losing

shops that installed automobile air conditioners. "He operated somewhat by the seat of his pants,"

Sternberg said. "When an idea appealed to him, he just plunged in. He was an entrepreneur in the

best sense of the word."

But there was little doubt about who was boss; his office was decorated with photographs of

himself, including one of him with former President Gerald R. Ford. A portrait of Rognlien
adorned the lobby at the Anaheim headquarters of Icee USA, which sold the product in the 14

Western states.

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