Prosecutor Urges Stiff Term for Raabe

Rejecting any suggestion that probation would be a fitting punishment, prosecutors have asked a judge to impose a stiff eight-year sentence on former Assistant Treasurer Matthew R. Raabe, arguing that he has shown no remorse for crimes arising from Orange County’s historic bankruptcy.

Raabe “was not a low-level public employee pilfering coins from parking meters,” said Senior Deputy Dist. Atty. Matthew Anderson, who helped to secure Raabe’s conviction on five felony counts.

“He was the county’s assistant treasurer who got caught stealing millions of dollars from unsuspecting schools, cities and special districts” with money in the county’s ill-fated investment pool, Anderson said in his brief. “Public officials are regularly convicted of misappropriation, but seldom do their crimes rise to the extreme level found in this case.”

Raabe faces up to 11 years in state prison when he is sentenced by Superior Court Judge Everett W. Dickey on Oct. 3. Before deciding the punishment, Dickey will consider Anderson’s recommendation, pleas by Raabe’s attorneys to spare him incarceration, and a probation report prepared by state prison officials in Chino.

The probation report has not yet been released, but from the tone of Anderson’s 35-page sentencing brief, it appeared that Chino prison officials recommended that Raabe receive probation.

Anderson said Raabe’s “crimes are too serious to justify probation. . . . Public policy demands that those who misuse public money be incarcerated.”

If Dickey heeds the district attorney’s request and sentences Raabe to state prison, Raabe would become the first county official to be jailed for crimes stemming from the county’s financial collapse in December 1994.

County officials declared bankruptcy on Dec. 6, 1994, after discovering that the county-run investment pool managed by Raabe’s then boss, former Treasurer-Tax Collector Robert L. Citron, had lost $1.64 billion on highly risky Wall Street securities.

A few months after the bankruptcy filing, Citron pleaded guilty to six counts of misappropriation of public funds by interest skimming and securities law violations. He was subsequently sentenced to serve a year in the sheriff’s work-release program, which allows him to spend nights at his Santa Ana home.

Former Budget Director Ronald S. Rubino, whose trial on similar misappropriation charges ended with a 9-3 verdict in favor of acquittal, later struck a deal that allowed him to plead no contest to violating a public records law and be sentenced to two years’ probation.

After Raabe was convicted in May, legal experts predicted that he could expect the harshest sentence yet to be handed down in connection with the bankruptcy.

Unlike Citron, who publicly expressed remorse and agreed to plead guilty even before he was charged, Raabe has vigorously fought the charges against him from the outset, causing the county to incur heavy legal costs.

In his brief, Anderson said Raabe devised the interest-skimming scheme because pool investors would have withdrawn their money had they found out that Citron was gambling on risky securities. Yet in testimony before the grand jury, Raabe accused Citron and Rubino of crafting the diversion scheme, Anderson said.

These false accusations demonstrated that Raabe was “not remorseful” and “has never acknowledged his own responsibility,” the prosecutor said.

Raabe’s “concern was for his own prestige and his own ambition, not the welfare of the agencies he served,” Anderson said.

Anderson acknowledged that Raabe had not gained personally from the $90 million stolen from pool investors. Some $13 million of that amount was spent by the county while the remainder was put in an account solely for the benefit of Orange County.

But Anderson said Raabe’s crime “reverberates beyond the momentary staggering loss. . . .”

In asking Dickey for an eight-year term, prosecutors considered that “public confidence in public officials has been shaken and we have considered the fractured relations between the county and those who placed their money and their trust with the county,” Anderson said.

Raabe’s attorneys did not return calls for comment, but they have consistently held that Raabe should not serve a day in jail.

During the past months, Raabe’s attorneys have been asking his former colleagues and even elected county officials to write letters supporting their client.

The Orange County Transportation Authority, which lost $221 million when the county went bankrupt, told Dickey in a recent letter thats Raabe had been cooperative in the agency’s suit against a brokerage.

But in his brief, Anderson rejected any idea of leniency.

“Public policy . . . demands significant punishment for those who misuse public money,” Anderson said.