U.S. Seizes Wymer’s Homes, Cars

Federal authorities Wednesday began seizing up to $15 million of property belonging to Orange County investment adviser Steven D. Wymer, alleging that his houses, condominiums, luxury cars and boats were ill-gotten gains from a securities swindle that defrauded investors of more than $100 million.

The U.S. Attorney’s office described the forfeiture action as “one of the largest financial fraud seizures ever.” The seizure targeted Wymer’s million-dollar home in Newport Beach, a 1991 Ferrari purchased for nearly $140,000, a 1986 Mercedes worth $25,000, seven other cars, three powerboats, eight bank accounts containing about $105,000, and 10 other properties in Newport Beach, New York City, Sun Valley, Idaho and Florida, authorities said.

Wymer has pleaded not guilty to federal charges of securities fraud, mail fraud, money laundering, lying to the Securities and Exchange Commission, and obstruction of justice. He has been held without bail since his Dec. 17 arrest.

Wymer’s attorney, Mark S. Roberts of Fullerton, said the extent of Wymer’s holdings should not raise eyebrows. “Mr. Wymer received $3 million to $4 million a year as salary for the last two or three years,” he said. “What he had, given his income, is not outrageous or unusual.” Roberts blasted the government’s property seizure before Wymer’s trial as “outrageous.” Wymer has already consented to a freeze on his assets that would prevent him from selling his holdings, Roberts said.

“A part of the reason that they did this may be an attempt to bias the court against Steven Wymer in his upcoming request for bail,” Roberts said. Wymer is scheduled to have a bail hearing in Los Angeles today before U.S. District Judge Richard A. Gadbois Jr.

The forfeiture complaint, filed Tuesday in U.S. District Court, contained the first government allegations that Wymer had personally profited from his clients’ losses. His attorneys have said Wymer lost the money in risky trading and denied that he looted the taxpayer funds entrusted to him, mostly by small cities, for investment in U.S. government securities.

The complaint alleges that Wymer made payments on two Manhattan condos with checks drawn on Denman & Co., one of his two Irvine companies; that he put Idaho properties worth $2.8 million into other people’s names after the SEC began investigating his activities but before a federal judge froze his assets; and that he used his Newport Beach home as a “satellite office” for the securities swindle.

Wymer’s clients included dozens of cities and other public entities in California, Iowa and Colorado. The cities of Orange and Torrance alone appear to have lost more than $13 million that has vanished from accounts he controlled.

Wednesday’s action was aimed at stripping Wymer of the fruits of his alleged fraud so that clients who lost money can be reimbursed, said Assistant U.S. Atty. Alejandro N. Mayorkas.

Mayorkas estimated the value of the seized property at $10 million to $15 million. He said he didn’t know how long an anticipated court battle over the assets might take or how the money might be distributed among the clients.

A number of cities have already hired lawyers or announced plans to try to sue Wymer for redress. In addition, the SEC has filed a civil suit against Wymer and pledged to try to recover investors’ money.

The civil forfeiture case, which is distinct from both the criminal case and the SEC suit against Wymer, is likely to be the easiest for the government to win, since the prosecution needs only to show probable cause that the assets were illicit, in this case obtained through money laundering. The burden is on the person whose property has been seized to prove that the gains were earned legitimately, Mayorkas said.

Prosecutors in the criminal case against Wymer said they have yet to untangle what became of the rest of the more than $100 million they allege is missing. And they are still not confident that all of Wymer’s personal assets have been identified.

Assistant U.S. Atty. Jean A. Kawahara said the Idaho real estate transactions represent evidence that Wymer was “trying to get his assets into the name of other people to hide them from the SEC and other people who were looking for them.” That “increases the likelihood that we have not found everything,” she said.

Until all of the missing client money is accounted for, prosecutors will ask that Wymer continue to be held without bail, Kawahara said. A bail hearing is scheduled today before Judge Gadbois.

Not all the assets targeted by the complaint were seized Wednesday, said U.S. Postal Inspector Pamela L. Prince. Five cars and two boats were not found in California or Idaho, she said.

Prince said postal inspectors arrived about 9 a.m. at Wymer’s three-bedroom home in Newport Beach, which has a tennis court, pool and hot tub, and is worth more than $1 million. Wymer’s wife, Ann Marie, cooperated with federal agents, although “she was not pleased,” Prince said.

Although the house now technically belongs to the U.S. Marshals Service, Ann Marie Wymer will be allowed to continue living there while the court action is pending provided she continues to meet all mortgage and maintenance payments, Prince said.

The house was “very nicely furnished throughout” with sculptures and a large collection of original paintings, Prince said. One bedroom contained a Stairmaster exercise machine, she said.

“We had a seizure warrant for his wine collection, believed to be worth up to $20,000, but it has been removed from the house,” she said. “It wasn’t there.”

Also seized Wednesday were three Florida properties owned by Wymer, including a Point Manalapan home purchased in 1990, according to the complaint. A $1.2-million promissory note on the property was paid off less than four months after the purchase, the complaint alleges. According to Mayorkas, a number of other properties, all purchased since 1985, were owned outright by Wymer.

In Idaho, agents seized a home in Blaine County, near Sun Valley, purchased by the Wymers in 1989 for about $2.8 million, Mayorkas said. The SEC began investigating discrepancies in accounts Wymer managed for Marshalltown, Iowa, last October and questioned him several times in November, court records show. Beginning in October, the prosecution alleges, Wymer began a cover-up, shifting funds into accounts from which they had disappeared in an apparent bid to dupe SEC investigators.

In early December, Wymer called a Ketchum, Idaho, real estate agent who in 1989 had sold him a $2.8-million home with a tennis court, a vacant lot and a small rental home near the Sun Valley ski lift. According to the agent, David Hutchinson, Wymer asked him to create a trust for the three properties.

“There’re a lot of people that have property, especially in resorts, in trusts, so I didn’t question it,” Hutchinson said in an interview.

The complaint alleges that, on Dec. 6, the Wymers signed the property over to Hutchinson, who on the same day signed a quit-claim deed back to them. Hutchinson said he signed over all three properties not to the Wymers but to the trust, a common procedure.

Then “all this stuff surfaced about his business,” Hutchinson said. “So we immediately stopped the trust and transferred everything back to his name. We didn’t want anyone to have the wrong impression.”

Hutchinson described the Wymers as “nice people” who visit Sun Valley a few times each summer and winter. He said he was shocked to learn Wednesday of Wymer’s other real estate holdings. “I had no idea he had a house in Florida,” he said.

Roberts disputed the prosecution suggestion that the transaction was intended to make it harder for the SEC to find or freeze Wymer’s assets.

“He was violating no law or order at that time, even if he did (put the property in other names),” Roberts said.

In addition, Wymer sold a Cessna jet in December worth an estimated $560,000. Ann-Marie Wymer also owns a 1989 BMW four-door sedan and a 1990 Mercedes-Benz coupe, according to state Department of Motor Vehicles records. Those assets were not targeted in Wednesday’s action.

Feds Go After Wymer Assets

Federal agents Wednesday attempted to seize up to $15 million of personal property owned by Newport Beach money manager Steven D. Wymer, who has been accused of defrauding clients of more than $100 million. Some assets were jointly owned by his wife, Ann Marie. These are the properties and their estimated values, if available.

REAL ESTATE

CALIFORNIA

2401 Santiago, Newport Beach. Wymer home, with adjacent tennis court at 2411 Santiago Drive. More than $1 million.

379 E. 23rd St., Newport Beach, rental home, purchased November, 1991, for $455,000.

Vacant parcel in Newport Beach, purchased in 1983, worth $340,000. No mortgage.

IDAHO

13328 and 13324 State Highway 75 North, Blaine County, 4,500-square-foot home with tennis court on six acres, purchased June, 1989, for about $2.8 million.

13298 State Highway 75 North, Blaine County, vacant lot, purchased November, 1989. Value unknown.

3109 and 3021 Warm Springs Road, Blaine County, home with adjacent lot and rental property, purchased November, 1989. Value unknown.

FLORIDA

4 Little Pond Road, Point Manalapan, home. Value unknown but in June, 1991, the Wymers agreed to assume a $159,000 mortgage.

3223 North Ocean Blvd., Gulf Stream. Value unknown.

Land parcel, Palm Beach County. Value unknown, although a March 30, 1990, warranty deed refers to promissory note for $1.25 million; on July 18, 1990, the mortgage was paid off.

NEW YORK

Hudson Tower, 350 Albany St., New York City, two condominiums purchased August, 1985, for $228,000 and $226,000.

CARS

1991 Ferrari, $140,000

1986 Mercedes-Benz, $25,000

1950 Plymouth; 1962 Pontiac GTO; 1963 Chevrolet; two 1967 Chevrolets; 1988 Mercury; 1991 Chevrolet. Values unknown.

BOATS

1990 Bayliner, $30,000

1933 Chriscraft. Value unknown.

1941 Chriscraft. Value unknown.

Sources: U.S. Attorney’s Office; U.S. Postal Service; forfeiture complaint; Idaho real estate agent; California Department of Motor Vehicles.