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Citron Pleads Guilty to Felonies : Former O.C. Treasurer Implicates Aide Raabe


SANTA ANA — In a stunning admission that implicated his once-loyal assistant, former Orange County Treasurer-Tax Collector Robert L. Citron pleaded guilty Thursday to misappropriating public funds, falsifying documents and misleading nearly 200 government agencies that trusted him to invest their money.

Citron, 70, faces a maximum of 14 years in prison and $10 million in fines but remains free while he cooperates with investigators who are conducting a criminal investigation of the Orange County bankruptcy.

The former treasurer pleaded guilty to six felony counts, two that involve making untrue "material" statements in connection with the sale of securities, a violation of the state corporations code.

Four other counts involve violations of the penal code dealing with misappropriation of public funds, failure to transfer public funds and maintaining false entries in a public record.

Orange County Dist. Atty. Michael R. Capizzi said investigators "have not found any evidence of personal gain by Mr. Citron." The misappropriation charges involve Citron's transfer of $80 million of interest earnings out of the common investment pool for the benefit of the county.

The surprise plea followed weeks of negotiations between Citron's attorney and the district attorney's office. It completes a dizzying fall for the reclusive ex-money manager, who was reelected handily just 11 months ago to the job he had held since 1970.

The swiftness of the plea agreement stunned most county officials, who were expecting the complicated case to drag on for months. The Orange County Grand Jury has opened a criminal inquiry into the county's financial collapse but apparently is weeks away from reaching a conclusion, sources said. A federal investigation is still pending.

David W. Wiechert, Citron's attorney, said his client "pleaded guilty because he's guilty. Mr. Citron didn't want to put the county to the expense of a lengthy trial. He's guilty and he wants to cooperate and make amends."

Citron directly implicated Matthew Raabe, his chief assistant, in many of his crimes.

"With the assistance of Matthew Raabe . . . I misappropriated in excess of $80 million of earned interest belonging to participants in the Orange County treasury pool to and for the benefit of the County of Orange," Citron acknowledged in his guilty plea.

Furthermore, he admitted that he and Raabe "improperly transferred securities from the Orange County General Fund to the Orange County treasury investment pool."

Raabe has not been charged with any crime, and his lawyer said Thursday that Citron's former assistant would be vindicated.

"Just the fact that Bob Citron tried to implicate my client and spread the blame to get himself a better deal doesn't mean it's true," said attorney Gary Pohlson. "All Bob Citron wants to do is get a better deal. Bob Citron is responsible for the Orange County bankruptcy, not Matt Raabe."

To Jail in Handcuffs

Citron entered his guilty plea at 5:40 p.m. in Orange County Superior Court before Judge David O. Carter after a 15-minute arraignment. When Carter asked the former treasurer whether he had had enough time to study his plea agreement with prosecutors, Citron responded in a quiet voice, "More than enough time, sir."

After the hearing, he was taken in handcuffs to County Jail, where he was booked and then released on his own recognizance. Citron was ordered to post $25,000 bail by May 19. He will remain free under the terms of the agreement he signed--so long as he cooperates with the district attorney's investigators.

As part of the agreement, Citron asked that sentencing be held in a court outside Orange County, a condition that prosecutors say they will not oppose. A status conference is scheduled for Aug. 4.

Capizzi said Citron was being offered nothing in return for his guilty plea.

"This was not a plea bargain; this was a straight-up plea," he said. "There have been no concessions." Capizzi characterized Citron's action as "throwing himself at the mercy of the court."

Citron faces up to 10 years in state prison for the six felony counts and up to four more years because three of the counts involved financial losses that exceeded $2.5 million.

In the written agreement, Citron said he and former Assistant Treasurer Raabe misrepresented the condition of the county's investment pool in several documents--the "Statement of Investment Policy" and the pool's annual financial summaries for 1992-93 and 1993-94. Citron acknowledged knowing that the documents "were false and misleading."

In addition, Citron admitted making false representations in documents describing various county bond issues last year.

Citron stated in his guilty plea that he prepared financial statements, "which I knew were false and misleading and contained untrue statements of material facts regarding the true condition and historical earnings of the Orange County treasury and its investment pool."

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