Raabe Defense Suffers Setback in Fight Against Felony Fraud Charges

Prosecutors pursuing felony fraud charges against a key player in the Orange County bankruptcy will not have to disclose any financial hits they suffered in the wake of the financial crisis, a judge ruled Tuesday.

The ruling is a setback for former Assistant Treasurer Matthew Raabe’s attorneys, who had hoped to show that the district attorney’s staff--like other county employees--could harbor a grudge against Raabe for potential retirement fund losses.

A hearing in Orange County Superior Court will continue Friday to decide if Dist. Atty. Michael R. Capizzi and his staff face a conflict of interest that prevents them from arguing the criminal case.

Raabe faces six felony counts of fraud and misappropriation of public funds for his role in the county’s December 1994 financial collapse. Raabe’s boss, former Treasurer-Tax Collector Robert L. Citron, has pleaded guilty to those same charges. Both face possible sentences of up to 14 years in prison.

Judge Everett W. Dickey ruled Tuesday that reviewing prosecutors’ stakes in county retirement funds would be an undue invasion of privacy. Dickey also said the disclosure would offer little insight without the context of other personal finance information to gauge the impact of losses.

“This is, in essence, a fishing expedition,” Dickey told defense attorney Richard L. Schwartzberg.

Schwartzberg had argued that prosecutors might be “affected by . . . being a victim” and that could alter their attitude toward the case.

Prosecutors had countered that bankruptcy recovery plans will probably restore any losses to the the county’s retirement fund. “Any talk of a loss would be, at the very least, speculative,” said E. Thomas Dunn, a deputy district attorney.