O.C. Asks 7-Year Term, $400,000 Fine for Citron

Orange County prosecutors have recommended that Robert L. Citron, the county’s infamous ex-treasurer, be sentenced to seven years in state prison and fined $400,000 for misappropriating public funds, falsifying documents and misleading nearly 200 government agencies that trusted him to invest their money.

The district attorney’s request, revealed in court documents Tuesday, falls short of the 14-year maximum prison term and $10-million fine Citron could receive under the law.

The district attorney’s recommendation, however, is very much at odds with the one contained in a presentencing report prepared by the San Diego Probation Department, which recommended that the man whose ill-advised investments led to the county’s $1.64-billion bankruptcy be spared any prison time.

“Some people are going to say it’s too harsh, some are going to say it’s not harsh enough,” Deputy Dist. Atty. Matthew Anderson said. “What we tried to do was look at the rules of court and the charges and toss into that mix a balance of his remorse and cooperation.”

Los Angeles Superior Court Judge J. Stephen Czuleger is scheduled to sentence Citron next week. The judge is expected to hear testimony during a two-day hearing from victims of the county’s Dec. 6, 1994, bankruptcy, as well as from Citron’s supporters, before handing down Citron’s much-delayed sentence.

In determining the appropriate punishment, the judge also will consider the recommendations from the district attorney, Citron’s attorney and the probation officer who concluded that the most fitting punishment for Citron would be probation--with the condition that he spend up to one year in County Jail. The probation officer’s report also recommended that Citron be ordered to pay $10,000 in restitution.

Prosecutors, however, strongly disagreed with the recommendations in the presentencing report--handled by the San Diego department because questions were raised about the impartiality of the Orange County Probation Department, which suffered severe cutbacks because of the bankruptcy.

“The People believe the interests of justice would best be served by the imposition of a prison sentence,” Anderson stated in his brief to the court.

Were it not for the fact that Citron voluntarily pleaded guilty to the six felony counts and helped investigators with their probe into the bankruptcy debacle, the district attorney would have recommended an even tougher sentence, according to prosecutors’ court documents.

David W. Wiechert, Citron’s attorney, said a term of probation and a $10,000 fine were the most appropriate punishments. And he strongly opposed any jail time as a condition of the probation. If such a detention is required, it should be “home detention,” Wiechert argued.

Wiechert said a seven-year prison term, as sought by prosecutors, could be tantamount to a death sentence for his 71-year-old client, who suffers a variety of ailments, from skin cancer to dementia. In court papers filed Tuesday, Wiechert said that Citron has already “paid dearly” for his crimes.

“The court’s punishment will be in addition to those already sustained by the defendant including: loss of employment, loss of dignity, loss of respect and reputation [and] loss of privacy,” Wiechert said.

Wiechert said prosecutors are seeking a punishment for Citron that is much more severe than other white-collar criminals such as junk-bond dealer Michael Milken, who received a two-year sentence, or Charles Keating Jr., who received a 10-year state prison term but financially benefited from his actions.

“Should a 71-year-old Robert Citron receive a sentence three times as long as Michael Milken, or a sentence that is 70% of Keating’s sentence?” Wiechert asked. “An affirmative answer to these questions is absurd.”

Just what kind of sentence should be imposed on Citron has been a controversial topic among county officials and community activists. Some believe that since he did not personally derive any financial benefit from his crimes, the judge should be lenient. Others argue that Citron’s crimes inflicted so much financial and emotional pain on thousands of county residents that he should be strongly punished.

“The right sentence may be an unpopular one,” Wiechert suggested in his court filing.

Accompanying Wiechert’s legal arguments was a letter to the court from Citron, who, for the first time, publicly expresses his sorrow for his actions.

“I am extremely saddened about the effect of my actions on the two things that I love the most [and] which I would never want to hurt, the County of Orange and my wife Terry,” Citron wrote. “There is no way I can make up to them the damage I have caused but I will die trying.”

Wiechert described his client as a frail man who was a poor student but worked hard to “overcome physical and psychological disabilities, and academic and private sector failures, to become known as one of the finest treasurer-tax collectors in America.”

According to a psychological report, commissioned by Wiechert, Citron was far from the financial “whiz” he was believed to be before the bankruptcy. In fact, the report alleges that Citron’s mental functions, which were tested after the bankruptcy, indicated that he is “seriously impaired” and “brain damaged.”

Court documents also contend that Citron, who was apparently suicidal after his resignation from the county, suffers from dementia and a host of other brain dysfunctions that have resulted in memory loss, problems organizing new information and obsessive-compulsive behavior.

By 1991, the requirements of his job and his “mental limitations” caught up with him, according to Wiechert.

“He evaluated $100-million securities, which required supercomputers to value, on handwritten pieces of paper and his calculator wristwatch,” Wiechert stated. “He relied primarily on his closest advisors, assistant treasurers with college degrees who were certified public accountants, and the largest brokerage firm in America with its global economists, risk managers and SWAT teams. In the end, his mind and his counselors failed him.”

Although Citron accepted guilt for misappropriating public funds, falsifying documents and misleading investors, he has repeatedly implicated his former assistant Matthew Raabe and Merrill Lynch broker Michael Stamenson as the masterminds behind his investment strategies. Both deny it.

Raabe, who has pleaded not guilty to the same charges Citron faced, is expected to go to trial next month. District attorney investigators apparently are still looking into any wrongdoing by Wall Street firms.

Wiechert concluded in his court documents that Citron deserves leniency.

“The court,” Wiechert stated, “is about to write the final chapter of a Horatio Alger novel turned Shakespearean tragedy.”

* EXCERPTS FROM LETTER: Citron asks for leniency to spare wife further grief. A20