Former Dixon Comptroller Pleads Guilty for Stealing $53 Million from City

Tom Kocal | Prairie Advocate News

In a case that received national attention and was the topic of discussion at many area City Council and Village Trustee meetings, the former comptroller of the City of Dixon, Rita A. Crundwell, pleaded guilty to a federal fraud charge on Wednesday, Nov. 14, 2012.

“Since the outset of this case, we have used every available means, including both criminal and civil forfeiture proceedings, to ensure the recovery of as much money as possible for the City of Dixon, its residents and taxpayers,” said Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois. Shapiro praised the FBI agents who conducted the investigation and the U.S. Marshals Service for its efficient management of the seized assets. He announced the guilty plea with William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Darryl McPherson, United States Marshal for the Northern District of Illinois.

Dixon, with a population of approximately 15,733, is located about 100 miles southwest of Chicago. Crundwell served as comptroller and handled all of the city’s finances from 1983 until she was arrested in April.

To conceal the scheme, Crundwell told city officials that the city’s budgetary shortfalls were due to the state being late in its payment of tax revenue to the city, knowing instead she had fraudulently transferred the city’s funds for her own use. Crundwell picked up the city’s mail, including bank statements for the illicit RSCDA account, to conceal the scheme and prevent other employees from learning about the secret account. When she was away, she asked a relative or other city employees to pick up the mail and separate any of her mail, including the statements for the RSCDA account, from the rest of the city’s mail.

Dixon’s mayor reported Crundwell to law enforcement authorities in the fall of 2011 after another city employee assumed her duties during an extended unpaid vacation. Crundwell, whose annual salary was $80,000 at the time, received four weeks of paid vacation and she took an additional 12 weeks of unpaid vacation in 2011. While Crundwell was absent, her replacement requested all of the city’s bank statements. After reviewing them, the employee brought the records of the RSCDA account to the attention of the mayor, who was unaware of the account’s existence.

While serving as Dixon’s comptroller, Crundwell also owned RC Quarter Horses, LLC, and kept her horses at her ranch on Red Brick Road in Dixon and the Meri-J Ranch in Beloit, Wis., as well as with various trainers across the country. In addition to the horses and all of their equipment, among the assets seized or restrained were Crundwell’s two residences and horse farm in Dixon, a home in Englewood, Fla., 80 acres of vacant land in Lee County, a 2009 luxury motor home, more than a dozen trucks, trailers and other motorized farm vehicles, a 2005 Ford Thunderbird convertible, a 1967 Chevrolet Corvette roadster, a pontoon boat, jewelry, and approximately $224,898 in cash from two bank accounts.

At the hearing, Crundwell admitted that she stole more than $53 million from the city since 1990 and used the proceeds to finance her quarter horse farming business and lavish lifestyle. Crundwell pleaded guilty to one count of wire fraud and also agreed that she engaged in illegal money laundering as part of her plea agreement with the government.

Crundwell, 59, formerly of Dixon, faces a maximum sentence of 20 years in prison and a $250,000 fine, or a fine totaling the greater of twice the gross gain or loss from her crime. The government anticipates that the advisory United States Sentencing Guidelines range will be 15 years and 8 months to 19 years and 7 months (188-235 months), while the defense position is that the advisory range is 12 years and 7 months to 15 years and 8 months (151-188 months). The plea agreement allows the government and defense attorneys to recommend whatever sentence they deem appropriate.

Crundwell remains free on her own recognizance pending sentencing, which Senior U.S. District Judge Philip G. Reinhard set for Feb. 14, 2013.

Crundwell agreed that she owes restitution to the city of Dixon totaling $53,740,394, minus any credit for funds repaid prior to sentencing. She also agreed to the entry of a forfeiture judgment in the same amount. Since she was arrested on April 17 this year, Crundwell has agreed to the liquidation of assets that she had acquired with proceeds from her decades-long fraud scheme.

To date, the United States Marshals Service has recovered approximately $7.4 million from the online and live auctions of approximately 400 quarter horses, vehicles, trailers, tack, and a luxury motor home, with additional auctions of personal belongings and real property in Illinois and Florida still pending. The net proceeds from the forfeited property will be held in escrow pending further proceedings on restitution to the victim of the offense. Under federal law, the government may continue to seek additional assets of a defendant and obtain restitution for up to 20 years after a defendant is released from prison.