Lt. Hagan's Handkerchief is a small light blue handkerchief belonging to Lieutenant Hagen, and bares his 'H' monogram in rich blue with an orange outline. It is an item that can be clearly identified.
Story[]
I could tell you where it is, but that would spoil all the fun...
This section contains spoilers! Read on your own peril.
In the Thief II: The Metal Age mission "Framed", Garrett uses this as a personal item to frame Hagen for the theft of the evidence box from the Shoalsgate Station vault. It is found on his desk in his office on the second floor of the station.