This Nov. 1996 file photo showing former Orange County treasurer Robert L. Citron sits in court in Santa Ana, California. Citron, whose bad investments as Orange County treasurer forced the county into bankruptcy in 1994, has died. He was 87.
Robert Citron, whose bad investments as Orange County treasurer forced the county into bankruptcy in 1994, has died. He was 87.
Citron died Wednesday after a heart attack, Orange County Supervisor John Moorlach told Orange County Register.
Citron made big bets on complicated investments that earned high yields but eventually caused $1.64 billion in losses. The county's subsequent bankruptcy was, at the time, the largest municipal bankruptcy in U.S. history.
A grand jury investigation found that Citron had relied on a mail order astrologer and a psychic for interest rate predictions.
Citron pleaded guilty to six felony counts and was sentenced to day work sorting mail in the county jail.
Citron later testified in a county lawsuit against Merrill Lynch that the investment house settled for $400 million.
Citron was a wizard of high finance earning millions of extra dollars for local governments with exotic investment schemes that soared over most everyone's head.
But in 1994, his investments went awry, and Orange County lost $1.64 billion, ushering county government into what was then the largest municipal bankruptcy in American history, according to the Orange County Register.
Citron was forced to resign from the job that had defined him, and he fell into a deep depression. In the devastation that followed, there was a startling revelation: Citron's office had been diverting money from school districts to the county and keeping two sets of books. The one-time financial hero became a convicted felon at 71.
Citron was fined $100,000 and sentenced to one year in jail. He served his sentence at the jail commissary, processing orders for toothpaste and candy bars that came in from the inmates. He continued to collect his $92,900-a-year pension.
Citron was born in Los Angeles on April 14, 1925.
He ran for county Tax Collector in 1970 and won.
The Register said Citron had no background in accounting or investing. He had never owned a single share of stock. But the offices were combined under his leadership nonetheless.