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Raabe Fingered Rubino as Scheme 'Mastermind' : Bankruptcy: Citron's lawyer cites former assistant treasurer's grand jury testimony on skimming from investment pool.

December 16, 1995|MICHAEL G. WAGNER | TIMES STAFF WRITER

SANTA ANA — Orange County's former assistant treasurer accused ex-Budget Director Ronald S. Rubino of being "the brains" behind a plan to skim millions of dollars in interest from the county's investment pool, a defense attorney charged Friday.

In seven hours of taped conversations with investigators, former Assistant Treasurer Matthew Raabe tagged Rubino as "the mastermind of this scheme" to shore up county finances with other people's money, the attorney for fallen county Treasurer-Tax Collector Robert L. Citron told a judge.

Attorney David W. Wiechert's statement in open court indicates that Raabe was a key witness against Rubino, who was indicted Wednesday of two counts of aiding and abetting the misappropriation of more than $60 million in interest to help the county replace the loss of state funds.

Rubino is the third county official facing criminal charges in the wake of Orange County's bankruptcy and faces nine years in prison if convicted. He could not be reached for comment.

Friday's hearing was held in response to Wiechert's continuing attempts to examine evidence against Raabe and others in an effort to persuade Superior Court Judge David O. Carter that because of mitigating factors Citron deserves probation, not prison.

Citron, who pleaded guilty to six felonies, faces up to 14 years in prison and a $10-million fine.

Wiechert contends that evidence gathered by the district attorney will show that others were just as responsible as 70-year-old Citron for the $1.64-billion collapse of the county's investment pool.

"My hunch was other people were involved and I was right [about Rubino]," Wiechert said Friday.

Citron, who pleaded guilty in April to six felony counts of securities fraud and misappropriation of funds, entered into a plea agreement in which he pledged to cooperate with investigators.

The interest skimming, Wiechert told the judge, "was a Rubino-Citron deal."

Then, Wiechert made the startling admission that Citron could not remember any discussions with Rubino when he met to assist the district attorney's prosecutors and investigators.

Wiechert said the scheme was brought to Citron by Rubino but the former treasurer can't recall any of the meetings with Rubino.

"I wish to God Mr. Citron could have helped the district attorney's office with regard to Mr. Rubino," Wiechert said. "There's no reason for him to protect Mr. Rubino."

In a court filing last month, Citron blamed Raabe for diverting the interest into a reserve account and later transferring it to the county's general fund. But Citron also contended in the filing that others in the county had to know what was going on.

"Undoubtedly, the idea of diverting interest to the county was either known by, or perhaps even had its origins with, county officials outside the treasurer's office," Citron claimed in that court filing.

At a hearing in October, Carter rejected a defense request to delay Citron's sentencing past Dec. 29, noting the former treasurer's value to the Orange County Grand Jury was limited since the panel's term expires at the end of the year.

But the judge agreed that Citron should be able to see and hear the evidence against Raabe. He ordered it released to Citron, which was how Wiechert obtained the tapes of Raabe's interviews with investigators from the district attorney's office.

Raabe unexpectedly decided last week to cooperate in the investigation, even though his trial is pending on the same six charges to which Citron pleaded guilty. Raabe spent a day and a half before the grand jury after a daylong interview with investigators.

Carter opened Friday's hearing by handing Wiechert transcripts of Raabe's grand jury testimony, admonishing the attorney not to reveal the contents until they later become public.

Because of the new charges against Rubino, Wiechert reiterated his request to examine the rest of the district attorney's evidence. But Carter turned him down and gave no indication that he would delay Citron's sentencing.

That prompted Wiechert to raise the possibility of an appeal.

"Whether I take it up now, or after sentencing, your honor, I don't think that's a good decision," Wiechert said. "I don't willy-nilly ask for information regarding people to prolong sentencing.

"It's not like we're sitting on our hands," Wiechert continued. "I didn't create this Rubino situation. All [Citron] wants to do is be at home with his wife for as long as he possibly can."

Carter responded: "I invite you to take that to the [appeals court]. I invite you to seek that delay if I'm wrong."

After the hearing, Assistant Dist. Atty. Matt Anderson said he could not comment on Wiechert's statements about Rubino and Raabe.

In a series of motions filed in recent weeks, Wiechert has portrayed Citron as anything but the investment genius the former treasurer once boasted of being. Wiechert said his client flunked out of college, failed in the business world and didn't succeed in life until he became a deputy tax collector.

Moreover, Wiechert said Citron has suffered from the steadily destructive effects of dementia during the last four years.

By early 1993, Citron stated in court papers, he "was feeling the effects of his psychological maladies and had begun to withdraw from public view."

The former treasurer, dressed in a gray suit, watched Friday's proceeding intently, and was ushered to and from the courtroom by investigators. Citron did not speak during or after the hearing.

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