The pair chatted for 15 minutes on air before arranging to meet at Auckland Airport later that day.Mr Holmes arrived but Fagan gave himself up to police, who were critical of Sir Paul's actions.
But Sir Paul was unrepentant, telling the Herald at the time he had been in the "people business" for 25 years.
"I think in his own strange, desperate way he was trying to say sorry and to make his position absolutely clear that he did not want to kill or hurt anyone, except himself, and that's why he phoned us," Sir Paul said.
In early 1997, Fagan admitted 129 charges, including kidnapping, having sex with a girl under his care and fraudulently obtaining the more than $1.2 million he embezzled from Northcote College.
He was jailed for five years in 1997 but released on parole from Manawatu Prison in March 1999.
A decade later Fagan was living in Palmerston North, the city he went to school in, and got involved in a business called Remote Management Systems or RMS, one of the companies at the centre of his latest fraud.
It was a thriving little start-up based around technology developed by Alan Jacks that makes broadband internet run up to 50 per cent faster.
The technology worked and the company even got a contract with Telecom (now known as Spark).
Mr Jacks, who has since moved to Christchurch, told NZME he had no idea of Fagan's background.
Looking back he remembers hearing whispers but nobody told him to his face who he was dealing with.
That all changed in August 2010 when company representatives met a journalist for an innocuous profile in the local paper showcasing RMS as a rising star.
Fagan chatted away saying, "This is going to make us big ... We have invested millions of investors' money, worked weekends and long hours and it's finally paying off.
"There was a problem though, Fagan spelled his name to the reporter as Jon Feygan.
"That's when I started to cotton on that something wasn't right," Mr Jacks said.
He and his wife visited the Palmerston North library, where he found Fagan splashed all over the front page of old Heralds.
Telecom pulled out of the deal and other telcos wouldn't touch Fagan.
Meantime, unbeknown to other shareholders, he was using forged and fake documents to try to attract investment."We always did have a genuine product and sales," Mr Jacks said.
"It was selling well. There was a good order book."
Mr Jacks is unsure how Fagan ended up chief executive of RMS but said he controlled the finances used "divide and conquer" tactics to stay in charge, never giving out much information and turning up at shareholder meetings claiming to have voting rights of absentees.
Some of the bravado dropped when his past, which he tried to claim was suppressed, was revealed.
"He came around to my house and said he'd done some bad things and he was prepared to leave the company for the good of the company.
"I gave him a few days and he didn't walk away."
Around him the business was failing.
Money was drying up, there were no sales, wages were unpaid and Fagan's repentance turned to rage.
Mr Jacks called a meeting with other RMS investors and they agreed to call in the Serious Fraud Office.
Despite being told to leave the company, Fagan used company funds to make a pointless and expensive sales trip to Africa.
"He turned into one angry individual. He turned up at my house one day looking very threatening," Mr Jacks said.
"That's when I took trespass orders against him."
With no business coming in, RMS was taken to court and put in liquidation over an unpaid debt in 2011.
Mr Jacks was forced to sell his house as he and other RMS shareholders lost their investments. Creditors got nothing.
Mr Jacks didn't see Fagan for a while, until a chance meeting in a supermarket in 2013.
The irony of Fagan buying champagne ham while Mr Jacks' tightened budget meant he was purchasing mince was not lost.
"He was just walking around in shorts and jandals looking like he owned the shop."
Now Mr Jacks is getting on his feet again and is re-launching his internet technology. Fagan is behind bars.
"I had all the time in the world for John. As a person he was generous and I never had any reason to doubt anything about him," Mr Jacks said.
"It hit me like a brick in the end. What I find more annoying is there's an awful lot of people that knew about him that didn't come forward early enough."
During the court process more details of Fagan's fantasies emerged, including claims he'd played rugby twice against the All Blacks, for Western Australia and British Colombia.
Fagan was jailed for three years and one month, a sentence he appealed today.
Mr Jacks laughed when he heard about the appeal.
"I think he's just looking for something to do," he said.
