Artwork eyed for auction, Convicted ex-Dixon comptroller’s trophies- Rita Crundwell

Most of former Dixon Comptroller Rita Crundwell’s big-ticket possessions are long gone. The hundreds of championship horses, the lavish houses, custom jewelry collection, a motor home fit for a rock star — they’ve all been sold off as part of a unique effort to pay off Crundwell’s staggering $54 million judgment for looting the town’s coffers over more than two decades.

Now, with Crundwell serving a 191/2 -year prison sentence and her tab still north of $44 million, federal prosecutors want to seize a decidedly lower-rent collection of items from her former ranch in Beloit, Wis., where she used stolen funds to amass not only a world-class horse breeding business but also a laundry list of knickknacks, some on the tacky side. There’s framed artwork depicting a horse drinking beer, a chair made of horseshoes and a leather tissue box embroidered with Crundwell’s initials. There are monogrammed ashtrays, wagon wheels, horse sculptures and decorative pillows. Even a photo described as “Rita & Dogs” must go, the feds say. The most symbolic, though, of Crundwell’s seemingly insatiable greed might be her collection of more than 700 horse breeding and competition trophies that once littered her Meri-J Ranch.

Longtime Dixon Mayor Jim Burke said Friday that most of the remaining assets are “junk” that will probably wind up in a rummage sale but that the trophies go to heart of Crundwell’s crimes. Rather than trying to sell them, he’s going to propose that the Dixon City Council formally ask for the awards to be returned to the city, saying they could someday be used in a “teaching way” about the dangers of greed. “That was what it was all about,” Burke told the Tribune by telephone. “It wasn’t about horses, it was about trophies.”

Crundwell, who started working for the city’s Finance Department in 1970, pleaded guilty in 2012 to funneling money from various city accounts into a secret account she controlled. The thefts began in 1990 and grew bolder over time, peaking at $5.8 million in 2008 alone, according to her plea agreement. Authorities have called her massive theft perhaps the largest municipal fraud in U.S. history. In selling off many of Crundwell’s most valuable assets through a series of auctions, the U.S. Marshals Service has already recouped about $9 million for the city after expenses, court records show. The most prized of the 400 or so horses auctioned off in 2012 was Good I Will Be, a world-champion stallion that was purchased for $775,000 by a Canadian woman who had recently won a multimillion-dollar lottery jackpot. About a year later, though, the horse was euthanized after surgery at Texas A&M University Veterinary Hospital. Dixon received another windfall of $40 million in 2013 when it settled a lawsuit against its auditors and bank for failing to catch Crundwell’s wrongdoing. Just less than $30 million ended up in city coffers after legal fees. Later that year, several hundred of the city’s 16,000 residents turned out for a meeting to offer opinions on how the money should be allocated. While some advocated cash payouts to residents, most wanted the city to be cautious with the money, the mayor said. Burke said the city ultimately decided to use more than $20 million to boost reserves and pay down debt that had accumulated, largely because of Crundwell’s fraud. There have also been investments in long-term capital improvement projects. The city, best known as the boyhood home of President Ronald Reagan, recently completed a $6 million downtown streetscape project funded by the settlement money, Burke said.


Another project is in the works to connect two vital walking paths along the Rock River. Burke, who is stepping down in April after 16 years as mayor, realizes the city has been lucky to recoup so much of the losses, especially considering victims in many fraud cases never see a dime of their money returned. “We’ve been very prudent and reinvested in the city,” he said, “and we’re sitting in pretty darn good shape.” U.S. District Judge Philip Reinhard has yet to rule on the government request to seize Crundwell’s trophies and other items found at the ranch. Once they are dealt with, Burke said, there are still a few big-ticket items left that could mean even more restitution to the city, including the sale of Crundwell’s interest in two Dixon-area farms that total about 325 acres.



Rita Crundwell Audit indicates positive future for Dixon

DIXON – Some of Dixon’s recent and infamous history was discussed at the recent meeting of the Dixon City Council.

Commissioners were given a presentation of audited financial statements from the 2012 and 2013 fiscal years, including former Comptroller Rita Crundwell’s final year with the city, and went into closed session to discuss releasing minutes from closed meetings after Crundwell’s arrest in 2012.

Crundwell last year was sentenced to 19 years, 7 months in federal prison for stealing nearly $54 million from the city throughout two decades.

A decision on releasing the closed-session minutes likely won’t happen for another two or three meetings, Mayor Jim Burke said, and would have to come back to the council as an action item on an agenda.

The audit started in August 2012, Wipfli’s Rory Sohn said, and had to begin with detailing and documenting the money Crundwell had stolen, in order to accurately adjust the starting financial figures.

Before Wipfli started the audit, the FBI took the city’s financial statements and accounting records, Sohn said, adding the auditors had to use the check register for the capital development account and bank statements from Fifth Third Bank.

The auditors were able to piece together the finances from 2002 to 2012, which accounted for about $50 million of the nearly $54 million that was stolen, Sohn said.

By starting in 2012 and working back, Sohn said the auditors were able to see the story of how the theft evolved, starting with overcharging businesses for sewer usage to writing checks for more than the city’s portion of actual projects that were receiving grants.

Going forward, the city has a “bright future,” he said, and the general fund could operate at a surplus. Paying off three bonds early, which Midland States Bank and Sauk Valley Bank allowed the city to do, will save the city nearly $4 million.

The city was paying about $500,000 a year in interest on those bonds, Sohn said.

The audit also looked at internal controls and found areas that could have been stronger. Some were simple, Sohn said, like the fact that Crundwell picked up the mail and the fact that the account she was taking money from was the only one with a manual check register. The other city accounts were automated, he said.

Remaining Charges Dropped Against Ex-Dixon Comptroller

Prosecutors on Tuesday dropped all remaining charges against a former city comptroller who recently began serving a lengthy federal prison sentence for stealing nearly $54 million from her northern Illinois community.
Lee County State’s Attorney Anna Sacco-Miller dropped the 60 state counts of felony theft that remained against former Dixon comptroller Rita Crundwell. The prosecutor explained that the state case would have cost taxpayers more money and would not have resulted in additional prison time because any sentence would have to be concurrent with the federal punishment.
Crundwell, who was Dixon’s longtime bookkeeper, admitted in federal court in November that she stashed public money in a secret bank account for about two decades and used it to fund her lavish lifestyle and her renowned horse-breeding operation. The money went toward everything from expensive horse trailers and luxury motor homes to jewelry and birthday bashes in Venice Beach, Fla. It ranks as one of the worst abuses of public trust in the state’s corruption-rich history.
Because Crundwell had sole control of the city’s bookkeeping, the theft went unnoticed for years, even as the city’s financial shape suffered, with streets and equipment falling into disrepair and city employees going without raises. There wasn’t even enough money to mow the grass at the cemetery.
The scheme unraveled only when a colleague who filled in for her when she went on an extended vacation became suspicious.
Crundwell was sentenced in federal court in February to nearly 20 years in prison. Her attorney in the state case, Bob Thompson, had argued that subjecting her to another trial would amount to double jeopardy.
The state case covered only the period from January 2010 until Crundwell’s arrest in April 2012, during which time she was accused of stealing about $11 million.
Dixon Mayor Jim Burke said he had wanted to see Crundwell back in court, but that he agreed with the state’s attorney’s reasoning.
“She probably made a wise decision in just dropping the whole thing rather than spending money just to get some kind of emotional satisfaction out of the fact that we’re trying to nail Rita’s hide to the door one more time,” Burke said.
Sacco-Miller said the state charges could still be re-filed if Crundwell’s appeal of her federal sentence is successful.
The 60-year-old Crundwell is jailed in Boone County pending her assignment to a federal prison. She did not appear at Tuesday’s hearing.
Copyright Associated Press


Dixon lawmaker introduces bills to stop a Rita Crundwell repeat

A Dixon state representative hopes some new Illinois legislation will keep a theft like Rita Crundwell’s from ever happening again. The new plan includes harsher penalties and more government oversight.

Lawmakers overwhelmingly passed three bills in the house. But there are concerns at least some of the legislation just adds more government to municipalities that already have oversight in place.

“That we have effective and strong prosecution at our disposal on the state level to make sure we can effectively deter this from happening and prosecute those who do it,” says Representative Tom Demmer.

He is a Dixon native helped introduce what’s being called the Anti-corruption Legislation. It was created after Rita Crundwell pled guilty to stealing $53 million as Dixon’s comptroller. One bill allows for forgery charges to be brought if an invoice or a receipt is counterfeited. The second establishes higher penalties for theft or misapplication of public funds.

“Both of those kind of recognizing that forgery is already illegal, theft is already illegal but when it happens with local government is has that added impact of harming people’s trust and confidence in local government. So we recognize that maybe those need a little more stronger teeth in prosecution,” says Demmer.

The third creates safeguards by making all counties and municipalities create a finance and audit committee which includes members of the government and the public. Winnebago County already has something like it, its called the finance committee.

“In some ways it would be redundant,” says Bill Crowley, Winnebago County auditor.

That’s because not only is each department audited and brought before that county committee. They have also gone a step farther.

“We have the checkbook online, you can go on our website and you can actually see the payments that we make to various vendors in real time,” says Crowley.

The bills are currently in the Illinois Senate. It still has to pass out of committee but senators should vote on the bills in May.

US Marshals Selling Rita Crundwell Jewelry

WASHINGTON – The U.S. Marshals Service is selling 351 lots of jewelry, including that of convicted former comptroller of Dixon, Ill., Rita Crundwell, and other fine jewelry, watches, gold bullion and coins via a live and Web simulcast auction Saturday at 10 a.m. CST in Fort Worth, Texas, and at

A preview will be held Friday from 11 a.m. to 4 p.m. at the Fort Worth Convention Center, 1201 Houston St., Room 204A, Fort Worth, TX 76102. The preview is open to the public and the media without an admission fee.

The items being sold were seized in federal court cases nationwide and have been forfeited to the government. Lots 150-298 are from the Crundwell case. The U.S. Marshals Service consolidates pieces from cases nationwide and holds a large auction several times a year. Proceeds generated from the auctions are used to compensate victims of crimes and supplement law enforcement programs.

For more information on the auction, go to or call 512-251-2780.

Disgraced former Dixon comptroller Rita Crundwell was sentenced today to about 19 1/2 years in prison

Dixon woman, Rita Crundwell sentenced to 235 months in prison after stealing $53 million from the city. (WGN – Chicago)
Disgraced former Dixon comptroller Rita Crundwell was sentenced today to about 19 1/2 years in prison for what authorities have called the largest municipal fraud in the country’s history.

U.S. District Judge Philip Reinhard ordered Crundwell taken into custody immediately to begin serving the sentence of 19 years and 7 months.

“I’m truly sorry to the city of Dixon and my family and my friends,” Crundwell said as she choked up before the sentencing, her first show of emotion since she was charged last April.

The judge spoke of the “sheer magnitude” of Crundwell’s fraud and her callousness in carrying it out over more than two decades.

“You showed much greater passion for the welfare of your horses than the people of Dixon you represented,” Reinhard told Crundwell. “You lived the lifestyle befitting a wealthy person, and you did this on monies that weren’t yours.”

Crundwell pleaded guilty to stealing nearly $54 million from the small northwest town over more than two decades to fund a lavish lifestyle while the town’s budget was awash in red ink.

Prosecutors asked that Crundwell, 60, be sentenced to as much as 20 years in prison, citing the staggering losses the city sustained.

Crundwell’s attorney, Paul Gaziano, asked the court to consider a lighter sentence. recognizing Crundwell’s cooperation with authorities after her arrest last April.

Several Dixon city officials – including the police chief and a city commissioner – were called to the witness stand to detail how Crundwell’s massive thefts crippled the city budget – though Crundwell led employees to think the economy and late state payments were to blame for the cash crunch.

And Mayor James Burke read from a victim-impact statement, declaring that there was not a culture of corruption at the City Hall.

Looking directly at Crundwell, the mayor said, “I hope you find purpose and meaning in your life.”

For the first time, authorities hinted that Crundwell’s thefts may have started even earlier than first thought, as far back as 1988. Previously, prosecutors said the thefts began in December 1990.

U.S. marshals have been working to recoup some of the losses to repay the town, best known as the boyhood home of President Ronald Reagan. So far, they have collected about $11 million from the sale of Crundwell’s 400 horses, ranch, personal property, a luxury motor home and other vehicles, and expect about $10 million to ultimately be returned to Dixon coffers.

“There was trust that the city of Dixon placed in Rita Crundwell. … You can trust but you have to verify, and I think that’s the lesson for other municipalities, governments,” Assistant U.S. Atty. Joseph Pedersen told reporters at the Rockford courthouse after the sentencing.

Burke said he was pleased to see Crundwell immediately taken into custody but said the sentencing was also emotional, “knowing her all these years and (to) think what a tragedy this whole thing is not only for the city but for her also.”

The mayor also questioned the sincerity of Crundwell’s apology, saying, “I think her conscience didn’t bother her at all.”

Crundwell still faces 60 state charges of felony theft, each of which carries a potential sentence of up to 30 years in prison on conviction. That case is due back in court in Lee County on March 4.

The Lee County state’s attorney said she would meet with town officials to decide whether to continue to pursue the pending state charges.,0,4868115.story

Dixon mayor to speak at Rita Crundwell sentencing

February 12, 2013 ( ROCKFORD, Ill.) — At least half a dozen public officials are expected to make victim statements at this week’s sentencing of a small-town Illinois bookkeeper who stole $53 million in public funds.

A government filing Tuesday says Dixon Mayor James Burke is among those who will describe how Rita Crundwell’s crimes devastated his northern Illinois community.
As the city’s longtime comptroller, Crundwell used the stolen money to fund her nationally renowned horse-breeding operation and luxurious tastes.

She’s scheduled to be sentenced Thursday in Rockford. The most the 60-year-old could face is 20 years in prison after pleading guilty in November to a felony count of wire fraud. A state case against her is still pending.

Prosecutors contend her case is one of the most egregious abuses of public trust ever in Illinois.

February 12, 2013 ( ROCKFORD, Ill.) — At least half a dozen public officials are expected to make victim statements at this week’s sentencing of a small-town Illinois bookkeeper who stole $53 million in public funds.

Related Photos

PHOTOS: Inside Rita Crundwell homes up for auction
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A government filing Tuesday says Dixon Mayor James Burke is among those who will describe how Rita Crundwell’s crimes devastated his northern Illinois community.
As the city’s longtime comptroller, Crundwell used the stolen money to fund her nationally renowned horse-breeding operation and luxurious tastes.

She’s scheduled to be sentenced Thursday in Rockford. The most the 60-year-old could face is 20 years in prison after pleading guilty in November to a felony count of wire fraud. A state case against her is still pending.

Prosecutors contend her case is one of the most egregious abuses of public trust ever in Illinois.

Rita Crundwell’s Jewelry Auction

These pictures are a small sample of the 228 pieces in the Crundwell jewelry collection that will be sold at a U.S. Marshals Service live auction next month.


When: Beginning at 10 a.m. on Saturday, February 23, in Fort Worth, Texas.

There will be a preview on Friday, February 22, between 10 a.m. and 3 p.m.

Where: The auction will take place at the Fort Worth Convention Center, 1201 Houston Street, Fort Worth, Texas. The sale will also be simulcast so participants may bid over the internet during the auction.

Detailed information, to include photographs and descriptions of the complete inventory, will soon be posted at


(The auctioneer manages the sale of all U.S. Marshals Service seized and forfeited jewelry so you may see other unrelated sales posted.)

Financial firm responds to city’s lawsuit

DIXON – CliftonLarsonAllen advised city officials in writing more than once that there was a problem with its lack of segregation of duties at City Hall, the company says.

The city has amended its lawsuit against CliftonLarsonAllen, one of the largest financial consultants in the United States, saying the company should have detected the theft of nearly $54 million by former comptroller Rita Crundwell.

“We believe we met our obligation to provide the city’s officials with information about its finances,” the company said in a statement to Sauk Valley Media.

Court documents revealed Crundwell used 179 phony invoices to steal city funds. The invoices lacked key information, such as the agency’s emblem or logo and a contact name and number of an employee who could be reached for questions.

While those and other examples should have raised suspicion, no evaluation or investigation was made of the phony documents by CliftonLarsonAllen for the past 21 years, the city government says in its suit.

The company also violated a federal statute by conducting an audit and not being an independent firm, the suit says. In other words, it was performing an audit on its own financial statements, since it compiled payroll and other city finances.

CliftonLarsonAllen denies it conducted audits for the city since April 2006.

Instead, their company spokeswoman says the firm was performing a compilation.

There are three level of financial reporting. A compilation is the lowest and involves strictly formatting financial data. The highest level of financial reporting is an audit, which involves study of the financial data presented.

“We provided the city audit services through April 30, 2005, and compilation services since April 30, 2006,” Jennifer Dirks said in a statement sent to SVM over the weekend.

“The contracts executed with the city and the reports issued on the financial statements of the city clearly described the services we were contracted to perform and did perform. The type of audits our firm performed through 2005 and the compilation services provided since 2006 did not require the sort of detailed testing needed to uncover the fraud or a forensic investigation to determine if the city’s comptroller Rita Crundwell was fabricating invoices.”

Documents dating back to 2006 from CliftonLarsonAllen on the city’s website refer to its reports as “compilation reports.”

Mayor Jim Burke declined to answer questions in regard to the city’s relationship with CliftonLarsonAllen, stating the city’s attorney Devon Bruce of Power, Rogers and Smith advised him not to make statements while litigation is pending.

According to the amended lawsuit, the firm determined it was not “independent” in 2005, according to nationally recognized accounting standards, which prevented it from performing the audit by federal statute.

The firm reached out to Janis Card Co., which had only two certified public accountants, little or no experience in performing municipal audits, and lacked the resources to perform the city’s audits.

A partner in the firm told Janis Card Co. that in return for signing the audit for the city, CliftonLarsonAllen would conduct and prepare the audit.

Further, CliftonLarsonAllen told the city it was doing only a compilation, meaning it provided financial statements for the audit, yet referred to their work as an “audit” in several emails to city supervisors that are listed in court documents.

In fiscal years 2010 through 2012, the firm billed the city $33,500, $34,750, and $37,000, respectively, for its work.

Janis Card Co. billed the city a total of $40,000 between 2006 and 2011. It also did not do the fieldwork or test fixed assets for the audit, according to the suit

The company said it will respond to these claims in proceedings.

“We are confident in the integrity and professionalism of the partners and employees of our firm,” the statement said.

“As accountants and financial services professionals dedicated to the highest level of client service, we take the fraud perpetrated by Rita Crundwell very seriously. We have been working with the City as it seeks to discover all of the facts that will describe what has happened in this case.

“CliftonLarsonAllen is one of the most respected firms in the country and we are committed to continuously enhancing our operations, performance, and practices to fulfill our responsibility to our clients.”