Dixon to Sell Off Assets to Repay Newport Beach : Deal: Former utilities director will return ‘close to’ $1.8 million he’s accused of embezzling, but keep not guilty plea. Attorney says ‘very serious psychological problems’ are mitigating factor.

Robert J. Dixon, the former utilities director accused of embezzling $1.8 million from the city of Newport Beach, has agreed to liquidate his assets to repay a significant portion of the money he is accused of stealing.

Attorneys for the 47-year-old Dixon, who is being held in the Orange County Jail in lieu of $500,000 bail, also said Wednesday that they have assembled clinical records dating back 20 years that show “very serious psychological problems” explain his actions.

In an agreement to be filed in Orange County Superior Court this week, Dixon will agree to return between $500,000 and $1 million to the city, according to his civil attorney, J. David Pittman.

“We can’t be more specific about the amount until we get an appraisal and begin the liquidation,” Pittman said Wednesday. The agreement obligates Dixon to “close to” the $1.8 million he has been accused of embezzling.

At the same time, Dixon’s criminal attorney, Stephan A. De Sales, was careful to emphasize that Dixon is maintaining his plea of not guilty to the two counts of felony embezzlement with which he has been charged.

Newport Beach City Atty. Robert Burnham said he has not received a copy of the repayment agreement, but acknowledged having talks during the past two weeks with a “very cooperative” Pittman.

If Dixon has in fact agreed to the liquidation, Burnham said, “I’m pleased.”

As for the difference between the value of the liquidated assets and the $1.8 million loss, Burnham said that Dixon would remain obligated for it.

However, he said there may be other sources that could indemnify the city. Burnham declined to discuss those, saying it would create “the expectation that we’re going to be able to recover the lion’s share of the money. I don’t want people to think there’s going to be more recovery, when there may not be.”

According to court documents, Dixon diverted municipal funds, in part by requesting that city checks for mineral rights and easement be made out to property owners who did not exist. Dixon would have the checks sent to the Utilities Department, claiming he would deliver them himself.

Dixon will also assume personal responsibility for much of the remaining debt, Pittman said, although it is uncertain how much of that will ever be repaid. Dixon’s assets include a plush, trilevel Huntington Beach condominium, his city retirement fund, property in Arizona, art, personal bank accounts, and stocks and bonds, Pittman said.

Dixon has “been fully advised and is fully in agreement” with the plan, Pittman said.

Both sides are cooperating in the sale of assets, Pittman said.

“It’s in everyone’s interest to absolutely maximize the liquidation value,” he said.

The agreement allows Dixon to retain personal possessions that have no great financial value, Pittman said. An earlier agreement also provides payment for Pittman and De Sales.

Dixon is scheduled to appear in Harbor Municipal Court on Friday for a pretrial hearing and on March 5 for a preliminary hearing. DeSales said that in preparing Dixon’s defense he has received psychiatric data on his client, including treatment records and evaluations dating back 20 years.

“No one is saying he’s insane,” De Sales said, but there is evidence of “very serious psychological problems . . . that will go a long way in explaining what occurred” while Dixon was employed by the city.

Included in this material, DeSales said, are findings and evaluations by at least seven psychiatrists, psychologists and evaluators, some of which deal with a “self-destructive syndrome” in Dixon’s life.

In December, 1971, Dixon was charged in U.S. District Court for the District of Columbia with 23 counts of embezzlement and mail fraud, covering the period from 1968-1971. Dixon was accused of diverting advertising revenue from Georgetown University’s student newspaper, the Hoya, to his own use. An initial attempt to plead not guilty by reason of insanity was rebuffed by a court-appointed psychiatrist.

In early 1972, Dixon pleaded guilty to two counts of embezzlement. He received five years’ probation and was ordered to continue psychiatric treatment for as long as necessary, according to court documents.

De Sales said that Dixon is “very depressed,” but that he is “coping” with his situation.

“Until decisions are made in a final way there’s going to be a lot of stress on this guy,” De Sales said.

While emphasizing that “nothing has been agreed to or resolved” with prosecutors, De Sales said that he would “not close the door” on settling the matter before the case goes to trial.