SANTA ANA — Prosecutors in four California counties are using millions of dollars from a recent state law to fight real estate fraud, and more plan to take advantage of the statute.

Orange County, however, isn't one of them.

The county could pick up as much as $600,000 under the law, which allows county supervisors to tack a $2 fee on most real estate documents filed with local recorder's offices. The proceeds are strictly dedicated for combating real estate fraud.

But in Orange County, which emerged last summer from the nation's biggest municipal bankruptcy, such a fee is tantamount to a tax, and Dist. Atty. Michael R. Capizzi won't ask for it.

"Pure and simple, I just don't think that in Orange County, in this post-bankruptcy era, there is an interest or a will on the part of anybody to suggest an increase in fees," Capizzi said.

Real estate fraud--especially foreclosure scams that are more prevalent in Orange County--is being handled adequately under the major frauds unit, he said.

Several insiders, however, say that Capizzi has another reason for passing up the chance to hire more prosecutors and investigators: the strained relationship between him and the county Board of Supervisors.

Capizzi's investigation of the board over its role in the county's bankruptcy led to last December's grand jury charges of willful misconduct in office against Supervisors Roger Stanton and William G. Steiner and a county manager. Capizzi is prosecuting the case. In turn, the board, at Stanton's urging, is threatening to launch a financial audit of Capizzi's office.

"We're interested in the fee, but there's concern that it might be perceived as a tax; and there's concern over the whole situation between the board and Mike," said Deputy Dist. Atty. John Conley, head of legislative issues and major crimes unit.

Given the current frosty relations between Capizzi and the supervisors, Conley said, "I'm not sure Mike wants to go in front of the board on that issue right now."

However, Capizzi insists the existing conflict plays no role in his reluctance to ask for the $2 fee.

"I determined last fall when it was signed into law that it was not something that would be looked upon favorably." Capizzi said. "When I reached that conclusion, I didn't know we would be bringing any cases against the board."