Why do government and public officials steal so often?
ROCKFORD, Ill. (WIFR) - We’ve seen our fair share of fraud and embezzlement in the Stateline recently. It’s especially maddening when public officials or government workers steal from the public.
Any mention of this type of theft, and one name often comes to mind: Rita Crundwell. She’s the former treasurer and comptroller of Dixon, and the mastermind behind one of the largest municipal frauds in U.S. history. Over a stretch of 22 years, she stole more than $53 million from taxpayers. Her sentence was 19.5 years in prison. She served less than half of that.
Former PricewaterhouseCoopers forensic accountant and author Tom Golden is not only an experienced fraud investigator, he also worked on the 2017 documentary about Crundwell, “All the Queen’s Horses.”
“Con comes from the word confidence,” says Golden. “These are people that gain your confidence and they’re very good at it, and Rita Crundwell was probably the best I’ve ever seen.”
While Crundwell’s name may be one of the most recognizable, she’s just one of a long roster of Stateline government and non-profit officials who have committed fraud or embezzled funds in recent years.
When asked if the Rita Crundwell case surprised Golden, he answered, “Well that it happened? No. What surprised me is that it actually became public.”
23 News gathered information from the U.S. Department of Justice and found that in 2021, 138 Local public leaders were convicted of corruption. From 2012 to 2021, Northern Illinois had the 6th highest corruption conviction rate in the U.S.: 263 of them. So how does this kind of thing go unnoticed for so long, especially in smaller communities?
“Most people think it’s the independent public accountant that is supposed to be the watchdog, and that is the absolute worst fallacy that perpetuates fraud,” says Golden. “They’re not trained to find fraud, but the public is oblivious to that.”
Steven Block, a U.S. Attorney’s office prosecutor, says something similar.
“You may find that a town treasurer or a town clerk is an elected person who does not really have as much experience. When there is a problem, or there’s someone more likely to exploit the controls in place, they might have an easier time of it.”
Both Block and Golden agree that when a public official commits fraud, three things are usually true. They call this the fraud triangle. First of all, the person has some sort of financial need that causes them to take the money. Second, they have an opportunity to take the money. Third, they can rationalize stealing from the public.
“They’ll do it once or they’ll do it twice because of a personal problem and they don’t get caught,” explains Block. “And then usually they do it until they get caught.”
Most recently, former Winnebago County Coroner Bill Hintz admitted stealing $14,500 from the county and from deceased people’s estates. Former Pecatonica Village President Bill Smull is under investigation for possibly misappropriating funds from his American Legion branch.
So, is there a way organizations can protect against the next Rita Crundwell or anyone like her?
Golden suggests, “Have a mechanism where an honest soul, an honest employee, can report inappropriate transactions. And they can do so anonymously and from the comfort of their own home.”
Block adds, “I don’t think elected leaders or anybody should have unfettered access to taxpayer funds without controls. That is simply asking for a problem. Should we trust our local leaders? I think we should! Should we also have controls in place to root out the bad apples and save people from themselves...absolutely.”
Hintz was sentenced to six months in jail last July. Rita Crundwell, though released early from prison, is in home confinement at her brother’s farm in Dixon.
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