Prosecutors Trying to Sell Horses Belonging to Former Dixon Comptroller Accused of Taking $53 Million

By: Lauren Kravets, Meghan Dwyer, Stephen Johnson, Dan Guthrie
By: Lauren Kravets, Meghan Dwyer, Stephen Johnson, Dan Guthrie

What does a comptroller do?

Definition cited from howstuffworks.com

A comptroller is essentially a state's chief accountant or financial officer. This appointed or elected official has all of the following responsibilities:

  • Oversees the state budget (which can amount to billions of dollars) and audits state finances
  • Ensures that the state's tax dollars are being well-spent and not wasted through fraud and abuse
  • Pays state employees and oversees their pension funds
  • Prepares financial reports for the state
  • Examines government contracts
  • Collects taxes and funds to pay for state programs
  • Educates the state's citizens about tax issues

Source:

http://people.howstuffworks.com/

government/local-politics/state-comptroller.htm

UPDATE: 6/15: Procesutors in the case of the former Dixon comptroller accused of stealing over 50 million dollars from the City of Dixon were back in court today. They plan to sell over 400 horses that were seized from Rita Crundwell.

Yesterday, prosecutors filed an amended complaint adding to the list of horses and other assets they wish to sell due to the expensive nature of caring for these horses.

The court has agreed to allow the sale of over 400 horses as well as 21 embryos and 13 saddles. Right now the costs are falling on the US Marshalls and an intervening company who have been caring for the horses. The proceeds from the sale are expected to reimburse the company and the U.S. Marshalls for money previously spent on the care of these horses. The remainder of the money is expected to be given back to the City of Dixon.

It may two to three months before the horses are able to be sold. The next hearing in the criminal case against Rita Crundwell is scheduled for July 23.


UPDATE 6/1: Former Dixon Comptroller Accused of Taking an Additional 100k from Fire Dept. Pension Fund
DIXON (WIFR) -- The accusations keep coming for Dixon's ex-comptroller. City leaders say she took more than 100-thousand dollars from the fire department's pension fund.

Dixon Mayor Jim Burke says she took the money within the last year to pay city bills before putting it back.

The two new interim comptrollers discovered the alleged theft about a week ago. We're told some interest was lost on the money that was taken out of the fund. Crundwell is facing federal charges for allegedly taking more than 53 million dollars from the city.

UPDATE: 5/5: Rita Crundwell pleads not guilty to wire fraud.
By: Meghan Dwyer
ROCKORD (WIFR) -- Dixon's ousted comptroller says she didn't do it. Rita Crundwell pleaded not guilty to wire fraud this morning. As you may remember she's being accused of stealing 53 million dollars and stashing it into a secret bank account.

Today Crundwell sat a table with her federal public defenders, wearing a sweatshirt and a pony tail. She waived a reading of the indictment and pleaded not guilty within the first ten minutes of this morning's arraignment.

Prosecutors say they have more than 11-thousand documents and photos showing how Crundwell pocketed her millions. Defense attorneys will now have to sort through all of that evidence. She's being represented by federal public defenders in both cases -- the criminal case and the civil case. Her horses and assets are being seized in the civil case. She will be back in court in June.

Her attorneys say they plan to file a financial affidavit to show how much money she still has, but they will be filing that under seal so the public won't see it.

Prosecutors say Crundwell used the money to create one of the nation's leading horse breeding operations as well as buy luxury homes, cars, and jewelry. They have requested a jury trial.


Click here to see the video footage of Crundwell leaving the courthouse and being questioned by reporters

Dressed in the same trench coat she was wearing when she was arrested, a gray sweatshirt, and pony tail, Crundwell sat by her public defenders this morning in federal court.

She waived a formal reading of the charge against her. Prosecutors say they have nearly 11 thousand pages of written discovery and photos that were taken as evidence. U.S. Marshalls have taken control of nearly 300 of her horses.

Her attorneys will be filing a financial affidavit with the court detailing what money she has left, but it will be filed under seal so the public can't see it. She will be back in court in June.

UPDATE: 5/1:

By: Meghan Dwyer -- According to a grand jury indictment, Dixon's ousted comptroller is accused of stealing more then $53 million from the city since December of 1990. She was previously accused of stealing $30 million.

That's considerably higher than the initial investigation indicated. 58-year-old Rita Crundwell was arrested two weeks ago on a single count of wire fraud. She has since been released and is scheduled to appear in court on Monday for arraignment.

Court documents show she opened a secret bank account on Dec. 18, 1990. She lied to city council members, saying payments from the state of Illinois were late. Then she used fake invoices to deceive auditors.

Court documents also say Crundwell routinely picked up the city's mail. When she was out of town, one of her relatives picked it up so other employees wouldn't discover the bank account.

Dixon Mayor Jim Burke says she fooled a lot of people for a long time, but he hopes the city will recover the majority of the money she stole.

The U.S. Attorney has also filed a parallel civil lawsuit for forfeiture. The government plans to care for more than 300 horses Crundwell has on her farm in Dixon because she can no longer afford to take care of the animals. The U.S. Marshall Service plans to contract with a horse caretaker who will mow the grass, feed the horses, and pay utility bills on the property.

Crundwell did not object to the seizure of the horses. Court documents say she admits using wrongfully obtained monies to purchase and care for some of the horses.

If she's found guilty, the horses and any newborns will be sold. The proceeds will be given to Dixon.

Many of her assets have already been seized, but prosecutors are seeking an injunction, preventing any real estate or other real property from being disposed of before the end of trial.

There was nearly $200,000 still in the secret bank account in April. That money has already been seized.


UPDATE 4/23:
By: Stephen Johnson

DIXON (WIFR) -- It's been one week since Dixon was hit with the biggest scandal in the city's history an alleged 30 million dollars embezzled by former comptroller Rita Crundwell.

Today, 23 News chatted with local business owners in Dixon and has more on what they think of Dixon's economic future after the shocking discovery.

Diane Schnake said, "I didn't know we had that much money."

For lifelong Dixon resident and business owner Diane Schnake of the Frameworks, the news of Rita Crundwell allegedly embezzling 30 million dollars came as a shock. It’s the biggest news to hit the city in years.

Schnake said, "By the time this is over, I think there's going to be some backlash. I think most of us in Dixon, we just get up and go to work everyday and hope that the powers that be will get this straightened out."

Despite the negative news surrounding the city, local businesses are staying strong and believe Dixon's reputation will be just fine once the scandal has passed. Dixon Area Chamber of Commerce President John Thompson released a statement on the situation, stating, "the corporate citizens of Dixon will continue, as we have in the past to work together to build a better community in which to live and do business."

Thompson declined to meet with us for the story. While it will take time to rebuild confidence within the city, local shops say the initial wave of visitors last week, brought in more business.

Schnake said, "The influx of media on Dixon was pretty phenomenal. I mean we've had people come in all of the businesses down here in Dixon. You know network news, local television and radio.”

Dixon has recovered approximately 200-thousand dollars from the account Crundwell used to allegedly steal the 30 million dollars. City leaders are meeting Thursday to begin searching for a new comptroller.


STATEMENT from the Dixon Area Chamber of Commerce and Industry:

The arrest of the Dixon City Comptroller last week was devastating news for the entire community. Although there has and will be
plenty of second guessing, blame and self-doubt generated by these events, it is our belief that the agenda for businesses, the community and each citizen should be to do our best to move forward making sure that this can never happen again. It will be important to rebuild our confidence, community sense of pride and secure our reputation.

This will not be an easy task but we will work to assist the process and we know members of the Dixon Area Chamber of Commerce and Industry and many others will do the same. The corporate citizens of Dixon will continue, as we have in the past, to work together to build a better community in which to live and do business.

We remain respectful of the many fine and honest people at the City of Dixon both elected and otherwise who had no part in this most
unfortunate chapter of Dixon's over 180-year history. The Chamber has represented Dixon’s corporate citizenry since 1887 helping to
build our fine community. Going forward we will support Dixon’s efforts to move beyond this situation in the best way possible.


UPDATE 4/23:
By: Lauren Kravets

DIXON (WIFR) -- Rita Crundwell is no longer the comptroller of Dixon. The city's commissioners voted today to remove her from office after she allegedly stole more than $30 million from Dixon.

In a unanimous vote all four Dixon commissioners and Mayor Jim Burke voted to terminate Comptroller Rita Crundwell. They did not accept her resignation letter she submitted over the weekend.

Mayor Burke said, "There's no great relief with it because there's a lot of things on the plate we got to deal with, but I think the public is going to feel better."

Crundwell was invited to the city council meeting to defend herself before she was fired; however, she did not show up. We tried to get a response from her at her home but no one answered.

City commissioners aren't speaking yet either, but residents still are.

Dixon Resident Dan Eychaner said, "There's more people than her involved--I'm sure of that--that's just my opinion."

Mayor Burke says that's a possibility.

He said, "I don't think there are anymore people in the city involved in this but whether or not there could be someone outside, that's very possible."

It’s been nearly a week since the scandal became public and the city has already recovered $200,000 from the secret account Crundwell used to allegedly steal more than $30 million.

Burke doesn't know how much more can be recovered, but they're keeping a closer eye on city funds. Three people, including the mayor and city clerk are now co-signing checks.

The city is now taking steps to see if state charges can be filed and they'll meet with an accounting firm on Thursday to discuss finding a new comptroller. The city's next regular board meeting is May 7th, that's when residents will be able to publically comment on the scandal.

Even if the council hadn't fired Crundwell, she couldn't do her job anyway because her bond conditions say she cannot handle money. She also wouldn't have been able to get her pension.

Meantime, the group Occupy Dixon will protest the scandal in downtown Dixon at 9 a.m. on Friday.


UPDATE 4/20:
By: Lauren Kravets

DIXON (WIFR) -- The City of Dixon is trying to move forward as scandal over its comptroller continues.

Dixon Mayor Jim Burke is meeting today to discuss finding an interim comptroller, although he says they're not expected to choose a person today.

Burke also says he's already met with several accountants and spoke to an attorney and a former banker. He wants to form a panel to help look at internal financial controls.

While the city is trying to move forward, residents say they're still upset that Rita Crundwell allegedly took more than 30 million dollars of taxpayer money.

Greg Schwartz said, "In a town as small as Dixon everybody knows everyone and to see somebody allegedly do something like that, I don't understand how anyone can lay their head on their pillow at night."

Dixon's City Council will meet Monday where they're expected to let Crundwell go.


UPDATE 4/19: The Effect on the City of Dixon
By: Lauren Kravets

DIXON (WIFR) -- The comptroller scandal out of Dixon continues to shock the Stateline. Many taxpayers are upset that their money was allegedly stolen and that the city suffered as a result.

23 News sat down with the mayor today, who told us Rita Crundwell won't be comptroller much longer.

Dixon Mayor Jim Burke Says he still can't believe one of his own employees allegedly schemed the city out of 30 million dollars over the last six years.

He said, "I literally got sick to my stomach thinking about what was going on."

Rita Crundwell will soon be out of her comptroller position as the city is expected to fire her.

Crundwell's personal things still sit in her office in city hall where she was arrested Tuesday. Even checks from the secret account she allegedly used to deposit and withdraw millions of dollars in city money for her personal use. Mayor Burke says it was difficult to work with Crundwell during the five months the FBI investigated before she was arrested.

Burke said, "Meeting with her having budget meetings and talking to with her about financial issues and knowing in the back of my mind what she's doing and also seeing she's continuing to take money.

Many community residents say that money could've helped the park district re-open Dixon's pool that's sat empty for about ten years.

Resident and Business owner Lisa Framke said, "For many years people have tried to raise money to try to refurbish the memorial swimming pool and at one point the estimate was two million."

Burke says the council also put off some agenda items.

He said, "City employees have gone three years without raises and we had to put off buying city equipment for the street department.

About a month ago the city even borrowed a couple million dollars--money that could've been there if Crundwell hadn't allegedly used it for herself.

We tried to get comment at her home but didn’t get an answer.

Burke says city council members will hold a special meeting Monday where they're expected to let Crundwell go.

Q: What about the accounting companies that did the city audits, why didn't they catch this?

A: We tried to reach out to them, but our calls weren't returned. Mayor Burke says he hasn't talked with them yet, but he plans to. He says he frustrated the city spent half a million dollars a year for those audits while the city was losing more money.

This case has brought international attention to the Stateline. A quick Google search found hundreds of news stories written about Dixon's comptroller including coverage from the Wall Street Journal, the Seattle Post, and even the British newspaper the Daily Mail. Meanwhile, network affiliates from around the country have picked up our story.


UPDATE 4/18: Dixon Responds to Comptroller's Misappropriation Charges
By: Lauren Kravets

DIXON (WIFR) -- The Dixon Community is still stunned after learning a trusted city official was arrested for fraud.

Today Dixon Mayor Jim Burke tried to address some community concerns at city hall. Dozens of residents packed city council chambers to hear Burke's explanation of how Comptroller Rita Crundwell could have embezzled more than 30 million dollars without anyone knowing.

Burke said, "I literally became sick to my stomach. I hoped that my suspicions were all wrong."

Mayor Burke says the city got an annual audit by two independent certified accounting firms. One firm double-checked the information and found nothing.

Burke said, "The results year after year disclosed no instances of non-compliance or other matters required to be reported under government auditing standards."

Mayor Burke also says the city faced budget cuts but thought it was partially due to late state payments. But those answers are still frustrating to community members.

Karen Wyman said, "Somebody has to be accountable for this, it's just unbelievable to me."

The city is taking six steps to restore credibility:

1. Work with the FBI
2. Independent Investigation
3. Interim Comptroller
4. Unpaid Leave
5. Research Financial Controls
6. New Accounting Firm

Crundwell worked at city hall almost every day, she was a trusted city official and well known in the community. That's why those who knew her well don't know what to believe."

Ron Pritchard grew up in Dixon and knew Crundwell and her family. He just saw her a few months ago.

We asked him, "Do you believe that Rita did this?”

He said, "I don't disbelieve it I've known Rita for a long time I'm so shocked by the allegations of it it's hard for me to swallow."

Mayor Burke says Dixon will not be laying people off—unrelated to the alleged crime--as a result of the missing money fall out.

Currently, they are preparing a monthly treasurers report and meeting with the economic development director of Sterling to help find interim comptroller.


Crundwell Can Post Bond
By: Meghan Dwyer

Crundwell has been in custody since yesterday. Just a few hours ago a federal judge decided whether she should be allowed to post bond.

We're waiting for Crundwell to be released from custody. A judge ordered she could be set free today as long as she meets some conditions. She can't sell her horses or any real estate. She can't get a passport and she can't have a job where she handles money.

She's allegedly stolen 30-million since 1980, purchasing lots of jewelry and cars. Two of her bank accounts have been seized. So we're not sure how much money she has on hand, but she is being represented by a federal public defender. As it stands she faces just one count of wire fraud. Prosecutors say more charges could follow as the investigation continues. Right now, she's only facing 20 years in prison and 250-thousand dollar fine, but prosecutors say they'll do everything in their power to get back all money taken over the years.

We spoke to the Lee County State's Attorney today, who says he's waiting for the federal court case to run its course before any state charges are filed.

If she violates those conditions she'd have to pay the court 45 hundred dollars. She'll be back in court May 7th.


The background story
By: Lauren Kravets

DIXON (WIFR) -- The Comptroller for the City of Dixon was arrested today by FBI agents on a federal charge for allegedly defrauding the City of Dixon of more than $3.2 million in public funds since just last fall and more than $30 million since 2006.

58-year-old Rita Crundwell has been Dixon's comptroller since the early 80's. She's well known in the community and breeds world champion horses on her ranch; someone most people couldn't imagine embezzling $30 million dollars.

"I was dumbfounded, I was speechless (when I found out)," said Dixon resident Amy Jones.

But that's exactly what the FBI says she did. She's accused of stealing more than three million dollars of taxpayer money in just the last few months and more than $30 million since 2006.

Crundwell was arrested at city hall this morning, where FBI agents gathered evidence most of the day. Mayor James Burke reported Crundwell to authorities in the Fall.

FBI agents wouldn't comment today on the complaint they received from Burke. But the complaint says in October, while Crundwell was on vacation, a Dixon city employee discovered an unknown bank account, one Crundwell allegedly used for her personal life.

Dixon resident Christopher Ray said, "It's disheartening, I mean taxpayers they work hard for what they do."

The FBI says Crundwell bought a $2 million motor home, a horse trailer and paid off $2.5 million on her credit card. They say she also bought at least 11 vehicles. It's something that even surprised Dixon police.

Dixon Police Chief Dan Langloss said, "I just became aware of this this morning from the FBI. Those are all things that are being looked into, and the mayor will have the answers and will be speaking to the city."

Mayor Burke will answer questions tomorrow at Dixon City Hall.

Crundwell was in federal court in Rockford today, where two U.S. marshals escorted her into the room in handcuffs. However the bond hearing was continued until tomorrow.


The Dixon City Council is meeting in executive session tonight to discuss the charges against their comptroller--the mayor, Jim Burke, will hold a news conference tomorrow at 10 am. 23 News Reporter Lauren Kravets is in Dixon and will have an updated report for you tonight.

DIXON (WIFR) -- A Dixon city official is in jail tonight for fraud after allegedly embezzling 30-million dollars.

The comptroller, 58-year-old Rita Crundwell, was arrested by FBI agents in Dixon just hours ago today.

She's been the comptroller since the early 1980s. She’s accused of taking more than, three million dollars in public funds since the fall and more than 30 million dollars since 2006. The Department of Justice says she used that money for a personal horses breading business and to buy a motor home, jewelry, and vehicles.

In fact today, agents seized; ten trucks and trailers and a thunder bird convertible. 23 News attended Crundwell's bond hearing in federal court today--that's where two U.S. Marshals escorted her in handcuffs. However, the assistant U.S. attorney asked for a continuance, she will be in court tomorrow.

Dixon Mayor James Burke reported Crundwell to authorities last fall after a city employee discovered another account.

That's the account Crundwell allegedly used to misappropriate city money.


Photo pulled from YouTube, video by AQHA


Original DOJ Press Release

DIXON (WIFR) -- The Comptroller for the City of Dixon was arrested today by FBI agents on a federal charge for allegedly defrauding the City of Dixon of more than $3.2 million in public funds since just last fall.

In addition, a federal criminal complaint alleges that the defendant, Rita A. Crundwell, 58, of Dixon, has misappropriated more than $30 million in city funds since 2006 to finance her own lavish lifestyle, including operating a horse farm.

Crundwell handles all finances for the city and has held the appointed position of Dixon comptroller since the early 1980s.

She is paid an annual salary of $80,000, according to the complaint charging her with one count of wire fraud that was filed last Friday and unsealed today following her arrest.

Also today, agents executed search and seizure warrants at various locations including, Crundwell’s home, office, and farms in Dixon and Beloit, Wis., and seized the contents of two bank accounts she controlled. Among other items seized were seven trucks and trailers, three pickup trucks, a $2.1 million motor home, and a Ford Thunderbird convertible, all of which were allegedly purchased with illegal proceeds.

Photos taken from Crundwell's ranch:

Crundwell is scheduled to appear at 3 p.m. today before U.S. Magistrate Judge P. Michael Mahoney in U.S. District Court in Rockford, where the issue of bond will be addressed. Dixon has a population of approximately 15,733 and is located in Lee County, about 42 miles southwest of Rockford. The arrest was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-In-Charge of the Chicago Office of the Federal Bureau of Investigation.

Dixon Mayor James Burke reported Crundwell to law enforcement authorities last fall after a city employee assumed Crundwell’s duties during Crundwell’s extended unpaid vacation. After reviewing bank statements for September 2011 through March 2012, the FBI expanded the investigation and began reviewing the city’s finances dating back to 2006. The investigation is continuing, officials said.

According to the complaint, Crundwell receives four weeks of paid vacation annually and she took an additional 12 weeks of unpaid vacation in 2011. In October last year, while Crundwell was away from work, a Dixon employee who served as her replacement requested all of the city’s bank statements. After reviewing them, the employee brought the records of a particular account to Mayor Burke’s attention. The September 2011 statement for that account showed three deposits totaling $785,000, as well as 84 checks drawn totaling $360,493, and 40 withdrawals totaling $266,605. Mayor Burke was unaware that this account existed, the complaint states, adding that he then went to law enforcement since none of the withdrawals appeared to be related to any legitimate business of the City of Dixon. Although the bank records show that the primary account holder is the City of Dixon, a joint account holder is listed as RSCDA, and the checks written on this account list the account holder as “R.S.C.D.A., C/O Rita Crundwell.”

2012, in her capacity as comptroller, Crundwell wrote 19 checks totaling $3,558,000 on the Capital Development Fund account payable to “Treasurer,” and deposited these checks into the account listing RSCDA as the joint account holder. She then allegedly took $3,311,860 from the RSCDA account by checks and online withdrawals, using only $74,274 for the city’s operations. Crundwell allegedly used the remainder of those funds, more than $3.2 million, for her own personal and business expenses, including approximately $450,000 relating to her horse farming operations, $600,000 in online credit card payments, and $67,000 to purchase a 2012 Chevy Silverado pickup truck.

After discovering that Crundwell allegedly had recently transferred $3,558,000 in city funds to the RSCDA account, the FBI obtained additional bank records showing that between July 2006 and March 2012, Crundwell allegedly deposited a total of $30,236,503 in city funds into the RSCDA account, and paid out more than $30 million for her own personal and business expenses. The complaint alleges that she used fraudulently obtained funds to make additional purchases, including a 2009 Liberty Coach Motor Home for $2,108,000, a 2009 Kenworth T800 Tractor Truck for $146,787, a 2009 Freightliner Truck for $140,000, a 2009 Chevrolet Silverado pickup truck for $56,646, and a 2009 Featherlite Horse Trailer for $258,698. Between January of 2007 and March of 2012, Crundwell incurred charges of more than $2.5 million on her personal American Express credit card account, including more than $339,000 on jewelry alone, and allegedly used Dixon funds to pay the entire amount of charges.

Wire fraud carries a maximum penalty of 20 years in prison, and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is represented by Assistant U.S. Attorney Joseph C. Pedersen. The public is reminded that a criminal complaint is only a charge and is not evidence of guilt.

The defendant is presumed innocent and is entitled to an indictment by a federal grand jury and a fair trial at which the government has the burden of proving her guilt beyond a reasonable doubt.


Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus
23 WIFR 2523 North Meridian Road Rockford, IL. 61101 Business: 815-987-5300 Fax: 815-965-0981 News: 815-987-5330 Fax: 815-987-5333
Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 147789155 - wifr.com/a?a=147789155
Gray Television, Inc.