Torrance officials disclosed Monday that a $1-million investment has been deemed illegal by city attorneys, adding to the financial woes of a city already stung by the disappearance of $6.2 million in another investment.
The $1-million investment in an insured loan program known as American Insured Mortgage Investors-88 was made four years ago by Torrance Treasurer Thomas C. Rupert, who has repeatedly defended the investment as sound and legal. But that investment is not permitted by the City Charter, which is guided by the state Government Code, according to a memorandum prepared for the city by an outside law firm.
City Atty. Kenneth Nelson said the city has not determined whether it will be forced to sell the investment.
If that happens, the $1-million holding would be worth only half that amount because of its long-term nature and other factors, according to officials familiar with the investment.