Former Orange County treasurer Robert L. Citron. 1996. / Associated Press
ORANGE, Calif. (AP) - Robert L. Citron, the Orange County, Calif., treasurer-tax collector whose bad investments forced the county into bankruptcy in 1994, has died. He was 87.
Citron died Wednesday at St. Joseph Hospital in Orange of complications from a heart attack, his wife, Terry Citron, told the Los Angeles Times.
Citron funneled billions of public dollars into investments that initially generated high returns, prompting cities, schools and other agencies to borrow millions of dollars to join in the investments.
The strategy backfired, and Citron's investment pool lost $1.64 billion.
In a move that rocked Wall Street, Orange County declared bankruptcy on Dec. 6, 1994. At the time, it was the largest local government bankruptcy in U.S. history.
Nearly $200 million had to be slashed from the county budget, more than 1,000 jobs were cut and the county was forced to borrow $1 billion. Eventually, however, it repaid its creditors.
A grand jury later found that Citron had relied on a mailorder astrologer and a psychic for interest rate predictions.
Citron pleaded guilty to six felony counts, including filing false statements to those taking part in a county investment pool. He was sentenced to work in the county jail commissary and allowed to return to his Santa Ana home at night.
Citron told the Times in 1997 that brokers duped him into making risky investments. He testified in Orange County's $2 billion lawsuit against Merrill Lynch, which paid $400 million to settle the suit while contending Citron was at fault.
Other Orange County officials faced criminal charges in the fallout from the bankruptcy.
Citron's assistant, Matthew Raabe, was convicted of fraud and misappropriation. He spent 41 days in jail before the verdict was overturned.
A grand jury indicted county supervisors Roger Stanton and William Steiner for failing to safeguard public funds but an appeals court dismissed the indictments.
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