Colorado castle sold at auction

DENVER – A historic castle where John D. Rockefeller and Theodore Roosevelt were guests – and where a coal baron’s ghost is said to haunt the halls – was auctioned for $4 million Saturday, two years after the IRS seized the century-old mansion in a fraud investigation.

A Pasadena, Calif., man made the winning bid, said John Harrison, an IRS special agent. The unidentified buyer declined to talk with reporters.

“I had a brief moment to meet him, and I think he’s going to be a real asset to the Redstone community,” said Walter Stanaszek, a University of Oklahoma professor who had the winning bid for a nearby Victorian home. “I’m just excited to say I have a neighbor that owns a castle.”

IRS agents seized the 42-room Redstone Castle in the mountains near Aspen in March 2003 while investigating an international Ponzi investment scheme. They also seized about $17 million in cash from bank accounts and race cars worth $2 million.

The castle’s previous owner, Leon Harte, was being investigated before he died in 2003. Court documents said Harte and others had formed three companies to buy the castle and the Victorian home for $6 million five years ago.

Investigators say about 1,000 people were bilked of a total of $56 million on the promise of 400 percent investment returns. A grand jury indicted seven people last year and trial proceedings are scheduled for September.

Proceeds from the auction will help reimburse victims, Harrison said.

The sale was the latest twist in the castle’s almost epic past.

Teddy Roosevelt stayed at the estate during a hunting trip after he left the White House; oil tycoon John D. Rockefeller did, too.

It was nearly abandoned after a mining bust, and some say the cigar-smoking ghost of its builder, coal baron John Cleveland Osgood – who died in the castle he named Cleveholm Manor – still haunts the place.

The castle, filled with antiques and surrounded by a carriage house, barn and other outbuildings in the Crystal River Valley about 170 miles west of Denver, was finished in 1902 at a price of $2.5 million – an astonishing sum at the time.

It was erected on a mountainside overlooking the coal-mining town Osgood built for his employees.

“It’s kind of like a medieval manor. The castle was about an aristocratic mile away from the village,” said Darrell Munsell, president of the Redstone Historical Society.

“It demonstrates Osgood’s philosophy of industrial paternalism. Osgood believed that his employees should be contented, satisfied workers,” said Munsell, who is writing a book about Osgood’s labor policies. “He thought if they were satisfied with their conditions, they wouldn’t join the union, and he would be rewarded with more production and less labor strife.”

Osgood built cottages for the married workers, a dormitory for single employees, a library, a community center, a store and other structures in his company town, now called Redstone. But it became a virtual ghost town by 1910 after the coal mine shut down.

The mansion was neglected until 1924, when Osgood returned. He died two years later.

Despite a string of owners, the castle and grounds remain largely unchanged. Since the 1970s, the estate has usually been open for tours, wedding parties and other events.

“The castle, of course, brings in tourism. Without the castle open to the public, that would really hurt the economy of Redstone,” Munsell said. “It attracts hundreds of tourists.”