U.S. Seizes Millions in Wymer Property

Federal authorities on Wednesday began seizing up to $15 million in property belonging to Newport Beach investment adviser Steven D. Wymer, alleging that the 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 home in Newport Beach, a white 1991 Ferrari worth $120,000, a black 1986 Mercedes worth $25,000, seven other cars, three power boats, seven bank accounts and 10 other properties in Newport Beach; New York City; Sun Valley, Ida., and Palm Beach County, Fla.

Wymer, who has been held without bail since his Dec. 17 arrest, 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.

The complaint, filed Tuesday in U.S. District Court, contained the first allegations that Wymer had personally profited from his clients’ losses.

Wymer’s attorneys have denied that he looted taxpayer funds that were entrusted to him, mostly by small cities, for investment in U.S. government securities, saying that he lost the money in risky trading.

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

Tuesday’s 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 alleged securities swindle.

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

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.

Wymer’s attorney, Mark S. Roberts, called the government seizure “outrageous.”

“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.