No Charges Filed in Camarillo Case

No criminal charges will be filed against Camarillo’s former treasurer because there is no evidence he earned any personal profit in the highly speculative bond market investments that lost the city $25 million last year, a spokesman for the Ventura County district attorney said Friday.

The former treasurer, Donald Tarnow, was fired earlier this year after officials learned he had lost nearly all of the city’s savings.

Tarnow did not divert any of the city’s money into his own pocket, Ventura County Deputy Dist. Atty. Roger A. Inman said. Investigators based that conclusion on city audit reports and interviews with government securities dealers who did business with Tarnow, Inman said.

Investigators also found no evidence that Tarnow accepted any money from securities dealers as an inducement to make the losing investments, Inman said. Those dealers earned an unknown amount of commissions from nearly $1.7 billion in securities trades made by Tarnow last year.

Tarnow has repeatedly denied any wrongdoing in the investment losses. He said in interviews earlier this year that a fall in bond market prices during the spring of 1987 caused the losses. He could not be reached for comment Friday.

City officials said earlier this month that they plan to sue Tarnow and three government securities dealers in an attempt to recover some of the losses. City Atty. Colin Lennard has not revealed on what grounds the lawsuits will be based or when they will be filed.

Tarnow lost the bulk of the city’s money through speculating on the resale of government-backed bonds. He used portions of the city’s $25-million investment fund to buy on margin as much as $270 million in bonds. Margin buying involves the purchase of bonds by paying only for a portion of their price and then trading them before the balance is due.

When interest rates began climbing at the end of March last year, the value of the bonds bought by Tarnow fell dramatically, forcing their sale at well below the price the city had paid for them.

Tarnow’s boss, Finance Director Larry Weaver, resigned shortly after the investment losses were revealed earlier this year. City Manager Thomas W. Oglesby also submitted his resignation, which is effective at the end of June. Both men said they did not know of Tarnow’s risky investment strategy but were ultimately responsible for Tarnow’s work.