Scheme to Steal Interest Was Raabe’s, Jury Is Told

In the same month in which he was promoted to assistant county treasurer, Matthew R. Raabe crafted a plan to steal nearly $90 million in interest from agencies that invested their money in a county-run investment pool, a prosecutor said Monday.

Raabe “didn’t put the [stolen interest] in his own pocket; he put it in his employer’s pocket,” said Deputy Dist. Atty. Matthew Anderson.

Anderson’s comments came during his nearly two-hour opening statement in the trial of Raabe, who is charged with embezzlement for his handling of the interest funds, and with violations of securities laws for allegedly lying to outside pool investors.

The prosecutor told a jury of six men and six women that Raabe was an ambitious county official and a “skilled accountant” who stole the interest earnings from other pool investors to plug a hole in the county’s budget in 1993.

Raabe also skimmed interest, Anderson said, to hide his boss’ risky but sometimes lucrative investment strategy that, if revealed, might have caused the cities, schools and other government agencies to withdraw their savings from the county’s $7-billion municipal investment pool.

Raabe, who has carefully avoided public events since his indictment in May 1995, appeared in good spirits as he walked into court wearing a navy double-breasted suit. He smiled with a small group of supporters in the public gallery and scribbled notes, occasionally casting glances at the jury in an apparent attempt to gauge reaction to the prosecutor’s opening remarks.

Raabe has consistently maintained that he was only carrying out the orders of his boss, former Treasurer Robert L. Citron.

His attorney, Gary M. Pohlson, declined to deliver an opening statement to the jury Monday, reserving his comments for the start of the defense’s case.

Anderson told jurors he would show how Raabe devised new accounting procedures to steal interest from other pool investors shortly after Citron picked him to be assistant treasurer in April 1993. Raabe even trained his staff to falsify county documents to cover up the theft, Anderson said.

Anderson said Citron will testify that Raabe came up with the idea to skim interest from the investment pool. According to the prosecutor, the assistant treasurer feared pool investors would become jittery and withdraw their money if they suspected that Citron’s high yields were due to gambles on risky securities.

Citron, who pleaded guilty to the same charges that Raabe faces, is serving a one-year jail sentence in a work-release program that lets him spend his nights at home.

Anderson said Citron, who handled the treasurer’s office investment functions, was an accounting novice who relied on Raabe’s expertise as a certified public accountant.

Citron was not an accountant, never took an accounting class in his entire life and could not even operate a computer, Anderson said.

Citron “made the money and Mr. Raabe kept track of” it, Anderson said.

Raabe’s trial is the second criminal trial arising from the county’s bankruptcy in December 1994.

The trial of former budget director Ronald S. Rubino ended in a mistrial last year with jurors deadlocked 9 to 3 in favor of acquittal. Rubino later pleaded no contest to one count of falsifying public records.

From all appearances, Raabe’s trial will be similar to Rubino’s. Many witnesses who testified at Rubino’s trial are expected to repeat their testimony.