Citron Begins 1-Year Sentence in Orange County Bankruptcy Case

SANTA ANA — Appearing slightly dazed and nervous, former Orange County Treasurer Robert L. Citron reported to his new court-mandated job Monday morning at a nondescript building in a small industrial neighborhood where he will sort requests from jail inmates for deodorant and postage stamps.

Citron, whose mishandling of a county investment pool triggered the largest municipal bankruptcy in history, was sentenced to one year incarceration after he pleaded guilty to six felony counts of falsifying documents and misappropriating public funds. He also was fined $100,000.

He was given the clerical duties at the sheriff’s commissary warehouse through the Community Work Program after friends and medical consultants testified that Citron, 71, was too frail and his mental faculties were too deteriorated to handle prison or heavy manual labor.

Sheriff’s Department spokesman Lt. Ron Wilkerson said Citron will work Monday to Friday, 8 a.m. to 4:30 p.m., with weekends and holidays off, and return home each evening. With time off for good behavior, he could be released from the program as early as Oct. 24.

Usually four to 10 work program participants report for duties at the building, filling requests from the pool of 5,000 county inmates, Wilkerson said. While there, they are considered to be “in custody” and cannot use the phone or come and go at will.

All inmate money is held by the county and deductions are made for requested personal items such as candy bars, stationery and deodorant. Requests are made in writing. It is now Citron’s job to sort and alphabetize the requests and pass them on to other participants who fill the orders, Wilkerson said.

Citron arrived Monday morning in a maroon, late-model Chrysler bearing the license plate LOV-USC. The man who worked his way up through the county bureaucracy to become the most celebrated, and then the most disgraced, treasurer in the nation attended USC and became a devout fan, although he never graduated.

Wearing a brown leather jacket, he made his way past three television news crews and entered the building without saying a word. In his apparent haste or nervousness, however, he parked behind another car, boxing it in. He had to return to the crowd to move his car.

The warehouse is in a small, unmarked beige building on a short street of light industrial offices, within several miles of the county building where Citron once managed an enormous investment portfolio. He oversaw billions of dollars in a county-run investment pool that drew money from about 200 agencies, schools and municipalities.

Using risky securities, Citron earned yields of 8% or more for the county investment pool, which was significantly higher than most other municipal funds. He said he based most of his investment decisions on advice from outside consultants, including brokers at the Wall Street brokerage house of Merrill Lynch.

The pool crashed in December 1994, causing a $1.64-billion loss and plunging the county into bankruptcy. Orange County was forced to lay off about 500 employees and cut services.

In April 1995, Citron pleaded guilty to six felony counts of defrauding pool members and misappropriating more than $100 million in interest. Since then, he has testified several times before the Orange County Grand Jury and at the trial of former budget Director Ronald S. Rubino, and he has cooperated with state and federal investigators.

Citron is the first person to publicly admit and apologize for any wrongdoing in the affair. Before Citron’s sentencing, Rubino was given a year’s probation but denied any wrongdoing.

Citron’s former assistant, Matthew R. Raabe, faces a trial in March on the same felony counts. Also facing charges is Auditor-Controller Steve E. Lewis.