Raabe Charged Anew in Bankruptcy Case

The district attorney’s office has decided to retry former assistant treasurer Matthew R. Raabe, whose 1997 conviction on charges related to the county’s bankruptcy was tossed out by an appeals court last year.

But county prosecutors may be removed from the case because of conflict-of-interest issues, and state officials may ultimately decide whether to proceed with the long-running case.

At a brief hearing Monday in Santa Ana, Raabe was arraigned again on charges of securities fraud and misappropriation of public funds. He entered a not guilty plea and was released on his own recognizance. He declined to comment.

Raabe was convicted of identical charges in connection with the county’s historic 1994 bankruptcy. It was the sole jury conviction stemming from the bankruptcy. Raabe served 41 days behind bars before being released on bail pending his appeal.

His conviction was overturned in November by the 4th District Court of Appeal, which ruled that his trial was unfair and marred by prosecutorial conflict of interest. They said former Dist. Atty. Mike Capizzi should not have prosecuted Raabe because the district attorney’s office was directly impacted by the county’s financial collapse.

Though the justices threw out the conviction, they did not order the recusal of the district attorney’s office over the conflict-of-interest issue. Ever since, state and county officials have been at odds over who should handle the case, with each saying it should be the other.

Officials from the state attorney general’s office said the county can fairly prosecute Raabe now because Capizzi no longer heads the office. But county prosecutors believe the office would still be open to conflict-of-interest questions that could affect the case.

Though they decided to pursue the charges anew, county officials did so only after state officials declined to handle it. And they share the defense’s view that their participation would constitute a potential conflict of interest.

“Our office is on the case, but we still believe it would be better handled by the attorney general,” said Tori Richards, spokeswoman for the district attorney’s office.

If the trial judge removes county prosecutors, the matter would be referred to the state attorney general. State officials say they will not make a decision until they receive the case.

Defense attorney Gary M. Pohlson said Raabe was not surprised by the county’s decision. But he said his client is hopeful that state officials will eventually drop the complicated case, which he said would be harder to prosecute the second time around.