Officials Take the Stand in Rubino Trial

Defense attorneys for ex-Budget Director Ronald S. Rubino began presenting their case Monday, seeking to show that officials with deeper knowledge of the treasurer’s office didn’t detect any illegality in a two-year period preceding the county’s bankruptcy.

Rubino, 44, is charged with helping then-county Treasurer-Tax Collector Robert L. Citron illegally skim $91 million belonging to nearly 200 cities and schools in an effort to solve the county’s budget problems.

Defense attorney Rodney M. Perlman called two top-level managers with the auditor-controller’s office as his first witnesses.

The first, John H. Nakane, the office’s chief of audits, testified that he found “nothing criminal going on” after examining Citron’s accounting records during a two-year period ending in 1994.

Robert Leblow, a certified public accountant in the auditor’s office, testified how Citron netted $21 million in profit in one year by investing $400 million in borrowed money.

The defense attorney is trying to show that top county officials--including the county’s auditors--routinely approved of the way Citron ran the treasurer’s office, and raised no red flags when the treasurer’s office reported high yields on investments.

Michael Fine, the chief financial officer with the Newport-Mesa Unified School District, testified that his agency was among four school districts that borrowed $200 million so that Citron could invest it on their behalf.

Fine’s testimony was meant to blunt the prosecution’s contention that Citron and Rubino plotted to skim millions from cities and schools into a reserve account where it could earn an additional $13 million in annual interest for the county. Rubino, the prosecutors say, aided the diversion to enhance his career.

Rubino’s is the first criminal trial related to the county’s financial crisis, which culminated in the filing of bankruptcy in December 1994.