Officials Start Grim Task of Tracing Lost $6.2 Million : Torrance: Only $93 appears to remain of the proceeds earned from the sale of a U.S. Treasury note handled by investment adviser Steven D. Wymer, who has been charged with fraud.

By DEBORAH SCHOCH

Dec. 26, 1991 12 AM PT

TIMES STAFF WRITER

Torrance officials are spending a gloomy holiday week tracking $6.2 million that disappeared about two weeks ago after proceeds from the sale of a U.S. Treasury note handled by an allegedly fraudulent investment adviser never reached city accounts.

The $6.2 million--one-eighth of the city’s investment portfolio--is part of millions of dollars that appears to be missing in a financial scandal involving investment adviser Steven D. Wymer of Newport Beach. Wymer, who heads an Irvine-based financial network, was charged last week with securities fraud and mail fraud.

Of Torrance’s money, only $93 remains, city officials have been told. The news has sent tremors through City Hall, where officials are poring over records and tallying finances. City officials say they are astounded at the turn of events.

City Treasurer Thomas C. Rupert remembers Wymer as “very clean-cut, well-mannered, (having) beautiful offices . . . just a real gentleman.”

Wymer had handled investments for Torrance for at least 2 1/2 years, officials said. Rupert said he talked to Wymer regularly and received daily documentation of financial transactions involving the city’s money.

“Never till the day this occurred did I have any reason to suspect anything was wrong,” Rupert said this week.

Rupert, an elected official who has been city treasurer since 1964, left Monday for a nine-day vacation. In an interview before he left, Rupert said he first met Wymer in 1988 through a state treasurers’ group, for which Wymer made several presentations.

Moreover, Wymer’s sales representative for Torrance was former Riverside Treasurer Harold Brewer, a man whom Rupert describes as “my friend for 20 years.”

A woman who answered the telephone at Brewer’s home Monday said Brewer would have no comment.

Rupert said he met with Wymer several times and talked to him on a regular basis. He initially invested $2 million of the city’s money through Wymer and then increased the amount, Rupert said. The service was good, Rupert said, and he received documentation within 24 hours of each trade.

The missing money apparently was tied to the city’s Nov. 15 purchase of a U.S. Treasury note that city officials believe was sold Dec. 9, with Wymer’s International Treasury Management serving as the city’s representative, Rupert said.

“The money didn’t go back into our account,” Rupert said.

Rupert believes the note was bought and sold through a New York broker, where a spokesman could not be reached for comment Tuesday.

City officials say that Rupert has assured them that Wymer was the only such financial adviser or middleman being used by the city.

City Atty. Kenneth L. Nelson said he is planning to hire outside attorneys to try to recover the money. Because of the city’s financial good health, no immediate budget cuts are expected.

One question plaguing city officials is whether the money invested through Wymer is insured.

Rupert cited a letter sent to another California city for which Wymer bought securities that discusses a $10-million insurance policy. As of Tuesday, however, Nelson had been unable to confirm if Torrance’s $6 million was insured.

Meanwhile, city officials say they are bracing for a “worst-case scenario” if the money cannot be found.

City Finance Director Mary Giordano is now studying the loss’ impact and hopes to have a full report by mid-January.

“We think in the short term that we have sufficient reserves that allow us a comfort zone,” City Manager LeRoy J. Jackson said. “In the long haul, it’s $6 million that will have to be addressed.”