Officials Doubt They’ll Recover $6.2 Million Lost to Wymer : Torrance: Mayor Katy Geissert is skeptical that the financier has the means to repay investment funds.

Torrance officials say they remain skeptical that they will recover money lost to Orange County financier Stephen D. Wymer, who pleaded guilty in federal court Tuesday to having bilked more than 60 government entities of millions of dollars.

Torrance Mayor Katy Geissert said she doubts that Wymer has the means to repay the city $6.2 million in investment funds lost through the money manager.

“For our purposes, that money is gone,” Geissert said.

Nevertheless, City Atty. Kenneth L. Nelson said the city will continue its civil suit against Wymer. Wymer’s guilty plea “can’t hurt” the city’s suit, Nelson said.

“Hopefully, it will help it,” he said.

In addition, Torrance has hired an outside law firm to go after the onetime city auditing firm of Deloitte & Touche, claiming that the Wilton, Conn.-based company failed to disclose to the city problems it had with Wymer in separate dealings.

Wymer admitted committing fraud but added that he had initially started a legal enterprise, managing money and making various types of investments for 61 clients. All but 19 of those clients have had their money returned to them. Wymer said he lost money through bad investments, then covered up the losses to clients and federal authorities by forging documents and making promises of high returns that were nonexistent.

The Securities and Exchange Commission, which also settled its civil case against Wymer on Tuesday, uncovered Wymer’s fraud last fall. The U.S. attorney’s office initially charged him with 30 counts of various felonies.

In his plea agreement Tuesday, Wymer agreed to plead guilty to nine counts of various felonies, including racketeering.

Wymer, 44, has been ordered to pay $209 million in restitution to his victims, which include cities as far away as Iowa. Wymer also agreed to forfeit assets worth as much as $15 million and to cooperate with authorities in a continuing criminal probe of his former business associates.

Those personal assets include 13 cars, four boats, properties in Newport Beach, New York City, Sun Valley, Ida., and Palm Beach County, Fla. Most of the assets were seized after Wymer’s arrest in December.

Nelson wondered how Wymer will be able to come up with money to pay the restitution.

“In any dealings involving Mr. Wymer, I’m extremely skeptical,” Nelson said. “Insofar as the city getting any money back from him, I will believe it when I see it and when the check clears the bank.”

Fallout From Wymer

Steven D. Wymer pleaded guilty in U.S. District Court in Los Angeles on Tuesday, settling government civil and criminal cases against him. He is accused of defrauding clients, mostly financially strapped cities and states, of more than $100 million. That is enough money to pay 2,000 teachers a yearly salary of $50,000. A look at how Wymer marketed his services and the fallout:

How he did it: Touting its ability to produce double-digit returns by investing in high-yield treasury securities, Wymer’s firm, Institutional Treasury Management Inc., persuaded recession-weary cities to use his services to counter falling interest rates. He used political allies to help get his foot in municipal doors.

His allies: Harold Brewer, finance director for Riverside; Kirby Warner, former assistant city manager and treasurer of Palm Desert, and Joseph Welsh, president of the Iowa Senate.

His method: Instead of charging the customary commission, Wymer’s contracts with cities called for his firm to get 30% of the net trading gains and the cities to get 70%.

The casualties: Dollar amounts in millions

State of Iowa $65.0 Palm Desert 12.3 Coachella Valley district 8.1 City of Orange 7.0 Torrance 6.2 Indio 4.3 Sanger, Calif. $2.8 Loma Linda, Calif. 2.7 Big Bear Lake, Calif. 2.5 La Quinta, Calif. 1.6 Grand Terrace, Calif. 0.7 Beaumont, Calif. 0.5

Other states affected: Colorado, Nevada, Minnesota, Utah, Texas, Illinois, New Mexico, Wyoming, Oklahoma, Virginia, Florida.

Other countries affected: Micronesia.

Source: U.S. Postal Inspection Service; some of the cities listed

Researched by DALLAS M. JACKSON / Los Angeles Times