12-cv-50153 Rita Crundwell case petition to intervene

The UNITED STATES OF AMERICA, by PATRICK J. FITZGERALD, United States
Attorney for the Northern District of Illinois, for its verified complaint against the above-named
defendant properties, alleges in accordance with Supplemental Rule G(2) of the Federal Rules of
Civil Procedure as follows:

Click Here to see entire court document 12-CV-50153-Rita-Crundwell-case-Petition-to-Intervene

Judge will allow sale of certain Crundwell Horses

ROCKFORD – Several of former Dixon Comptroller Rita A. Crundwell’s properties and a luxury motor home may soon be on the market, a federal judge ruled Wednesday.

Judge Philip G. Reinhard granted an agreed motion between federal prosecutors and Crundwell to sell her properties at 1679 U.S. Route 52, Dixon; 1556 Red Brick Road, Dixon; 1403 Dutch Road, Dixon; 80 acres of land in Lee County; and 821 E. Fifth St., in Englewood, Fla.

A $2.1 million 2009 Liberty Coach motor home also will be sold.

In an order filed Wednesday, Reinhard directed the U.S. Marshals Service to sell the items and place the proceeds into the Marshals Seized Assets Deposit Fund until Crundwell’s criminal case is resolved.

Those properties, along with nearly 400 horses nationwide, were taken over by the Marshals Service following Crundwell’s April 17 arrest at City Hall.

Crundwell, 59, is free on a $4,500 recognizance bond and charged with one count of wire fraud, punishable by up to 20 years in prison.

Prosecutors say Crundwell misappropriated more than $53 million in taxpayer money over two decades to pay for her horse operations and her “lavish lifestyle.”

In two motions filed late Friday, Assistant U.S. Attorney Joe Pedersen wrote that prosecutors want to sell the assets because “financial responsibilities relating to the subject properties are burdensome and the defendant does not have the means to meet the obligations.”

Pedersen wrote in the motions that Crundwell and her attorneys agree to the sale, although in doing so Crundwell is not admitting guilt.

Reinhard’s order will allow marshals to secure the property to prepare them for sale, as well as “assume any leases pertaining to the crops and farmland” at the Dutch Road and Lee County properties.

Marshals can deduct costs from the proceeds that are related to the sale and maintenance of the properties, Reinhard ordered.

Marshals Service spokeswoman Lynzey Donahue said Tuesday that once the judge approves prosecutors’ request to sell the property, an appraisal will be done.

From there, the agency will decide the best way to sell the property, whether it’s by auction, sealed bids, or sale by a broker under contract, Donahue said.

Judge allows sale of Dixon official’s assets

A federal judge has ruled several properties and a luxury motor home belonging to former Dixon comptroller Rita Crundwell can be sold.

Crundwell has pleaded not guilty to charges alleging she stole more than $53 million from the small northern Illinois city to pay for a lavish lifestyle and create a horse-breeding operation. A federal judge on Wednesday granted a motion to sell four properties in Illinois, one property in Florida and a $2.1 million motor home.

Both prosecutors and Crundwell agreed to the motion. Money from the sales will be put in a fund until Crundwell’s case in resolved.

It also appears Crundwell owns more horses than previously thought. An amended complaint claims Crundwell has admitted to owning between 350 and 400 horses. Prosecutors originally cited 311 horses.

They simply trusted her.

They simply trusted her.

Even after Rita Crundwell bought the $2.1 million motor home. Even after her herd of fine quarterhorses grew to more than 300 animals. Even after she bought semi-trailers worth hundreds of thousands of dollars. All in her role as the $80,000-per-year comptroller and treasurer of Dixon,Illinois.

The well-liked Crundwell,59,allegedly has stolen $53 million in more than 20 years from her hometown of Dixon,from a city budget that annually never has reached $10 million.

I was in Dixon the other day for another purpose,yet I had time to nose around a bit for a possible column,although folks I talked with at Books on First Street and a barbershop were a little reluctant to talk for the record.

There are lessons for all governments in the charges leveled by the U.S. Attorney’s Office for the Northern District of Illinois. First,a little background.

Rita Humphrey graduated from Dixon High in 1971. She made the National Honor Society her senior year (one of 19 in a class of 331), was elected senior attendant in the 1970 homecoming court,and served as president of the Office Occupations Club. In high school, Rita interned with the Dixon city government and stayed on after graduation.

By 1984 she was selected by the city commissioners to become Dixon’s comptroller and treasurer.

Rita married a man named Crundwell and lived modestly throughout the 1980s. They divorced in 1986; no children. By the 1990s her participation in the quarterhorse world accelerated.

In 1990,Rita Crundwell also created a secret city account into which she allegedly began transferring city receipts,spending from the account to support her rapid rise up the rungs of the national quarterhorse world.

The attractive Crundwell became the best in the American Quarterhorse Association,by 2011 having won “best owner and exhibitor” eight years in a row.

All that takes big money in an activity known notoriously as a money pit. Horses are expensive. A horseman I know estimates that a fine equine specimen costs around $300 per month to feed,bed,see a veterinarian. That means more than a million dollars per year just for the upkeep of her 311 horses,not counting labor.

To feed her ever more expensive habit,which included frequent wining and dining of fellow quarterhorse aficionados in her Florida vacation home,and apparently $300,000-plus in jewelry paid for by the city,Rita’s rate of theft apparently increased. She is alleged to have stolen $3 million from the city in just the sixmonths prior to this March 31.

While Rita was away on vacation last year,city clerk Kathe Swanson filled in for her and discovered the secret account. She and Mayor James Burke took the evidence to the FBI,and kept their secret for sixmonths while the FBI investigated —and Rita continued her thievery.

Dixon is a picture postcard city of 16,000 nestled along both sides of the broad Rock River in Northern Illinois. A statue of favorite son Ronald Reagan graces one side of the riverwalk and that of A. Lincoln the other. Townsfolk fish beneath the Ronald Reagan Bridge,just a stone’s throw from downtown Dixon.

The citizens of Dixon seem angered and embarrassed,worried maybe that their fine community will be mocked for being led by rubes who can’t notice $53 million missing dollars. And fingers are being pointed.

The city manager of neighboring Sterling said he noticed negative fund balances in Dixon and raised red flags with unnamed Dixon officials. Outside accountants are admonishing the city’s auditors for not calling for a listing of city bank accounts.

This isn’t the first such major embezzlement in Illinois. In 1959,state auditor of public accounts Orville Hodge stole $1.5 million from state accounts; he spent eight years in the hoosegow for the privilege. Similar to Crundwell,he was at the time responsible for both the pre-audit and the post-audit.

What to do? Dixon already has instituted some redundancy in its financial system,requiring more than a single signature on checks,for example.

Now it needs to shed the commission form of government and replace it with the more professional council-manager form. In a commission government,five commissioners are elected to be both the executive and the legislative branches of city government. Each commissioner is given a portfolio to manage, such as finance,public works,and public safety.

Unfortunately,most elected commissioners are amateurs when it comes to their portfolios. As illustration,the previous finance commissioner for Dixon in 2011 praised Crundwell in his departure speech for watching vigilantly over every dollar of the taxpayers’ money.

As Dixon’s own Ronald Reagan said so famously,”Trust,but verify.”

More Rita Crundwell questions

Q: Who is the relative prosecutors say picked up the mail when Crundwell was on vacation? Why did the mayor and the commissioners allow that? Will this relative be arrested?

A: We haven’t been able to get confirmed who was picking up the mail.

Until this fall, when Kathe Swanson came to Mayor Jim Burke with the bank statement they said neither of them knew about, Burke said he didn’t know a relative was getting the mail.

The other commissioners I spoke to also said they were unaware of the practice. Commissioner Jeff Kuhn said that would have been a huge red flag had they known, but as part-time commissioners, they don’t deal with day-to-day things such as the mail.

The FBI will not comment on whether anyone else is being investigated or whether additional arrests are pending.

Q: The Dixon Municipal Band had its budget cut in half this past fall. Will any money recovered go toward restoring that program?

A: There’s no one place the money could or must go. If revenue figures end up being different than otherwise thought, those additional dollars would go through the same budgeting process that the city goes through each year.

But until the mayor and the commissioners know what kind of money we’re actually talking about, they said they don’t want to get into that.

If you would like to see the funds go toward the band, or toward anything else, you can always write a letter to the editor (you can find guidelines here: saukvalley.com/forms/letters/) or speak during a public comment period at the beginning of Dixon City Council meetings. Call Kathe Swanson at City Hall, 815-288-1485, for details.

Q: Is Dixon going to get a city manager?

A: In a letter to the council sent out Friday, the mayor proposed establishing a seven-member panel to discuss changes to Dixon’s government.

That would include deciding whether to hire a city manager as well as looking at the commission form of government. It will take a council vote to establish the citizen panel.

So, although the mayor himself is not advocating a particular form of government at this time, he is pursuing that line of thinking.

Q: What’s with the board with nails that was buried in the circular drive off Red Brick Road just past the buildings at Crundwell’s ranch?

A: From conversations with law enforcement officials, there appears to be nothing wrong with a security device like the one described by readers as long as its on private property.

But when I asked the U.S. Marshals Service, which is overseeing the horse ranch, about the board, I was told they were unaware of it and would look into it.

The board has since been removed, a marshals spokeswoman said, and an alternative security measure had been taken to prevent access to the ranch.

Q: Why are people who aren’t associated with Occupy Dixon showing up as members of the group on Facebook?

A: In 2010, Facebook changed the way they do groups. This change means that anyone who is invited to a group is automatically added as a member.

We’ve heard from a lot of people who are upset that they’ve been added to Facebook groups without their consent. If you are one of them, you can remove yourself by hovering over the group’s name in the left-hand column. A little icon that looks like a pencil will appear. Click that and choose Leave Group. You no longer will appear as a member in that group.

Dixon to delay investigating former comptroller

DIXON, Ill. (AP) – Officials in the northern Illinois city of Dixon are holding off on investigating a former financial officer accused of stealing more than $53 million in public money.

Dixon Mayor Jim Burke tells WHBF-TV the city is waiting until the FBI finishes its investigation of former comptroller Rita Crundwell.

Prosecutors say she used the money to fund 1 of the nation’s leading horse breeding operations and feed a lavish lifestyle that kept her outfitted with cars and jewelry.

She has pleaded not guilty to a single count of wire fraud.

Dixon’s mayor says an investigation now would cost the city hundreds of thousands of dollars, on top of the millions Crundwell is accused of stealing.

Horse Industry Talks Crundwell

The American Quarter Horse Association is a abuzz after one of its most prominent members, former Dixon Comptroller Rita Crundwell, is accused of stealing more than $53 million from her day job.

Reps with the AQHA tell KWQC Crundwell donated more than $1500 dollars to their foundation in 2011. She has also donated between $1500 and $10,000 in her lifetime, putting her in the “silver” category for donations.

So far, the association has not been contacted by the FBI in regards to these donations, but Crundwell did make money from this.

Horse showmen say you can get anywhere from $2500 up $100,000 for a win, but they say you can’t make the kind of money Crundwell had solely from this.

“You just wonder how she was coming up with that,” AQHA Member and Judge Larry Hansch says.

“She always had a lot of money and people always wondered, where she get all that money?” John Irvin, who’s been in the industry for 40 years says.

Rita Crundwell is a hot topic in the horse industry nowadays. The former comptroller had an expensive hobby; horsemen say it’s enough to make a living, but not the kind of living Crundwell had.

“She would have a cargo trailer for her equipment and her clothes pulled by another big truck, and all of her help came in other vehicles,” Irvin says, “There was a big caravan, and when Rita pulled in you knew she was there.”

Many who were at the same shows as Crundwell say she was always very generous with her money, donating to and sponsoring several shows.

“At the time, nobody knew, and we all asked questions and never got the questions answered until now,” Hansch says.

Now that those answers have come out, there are still a lot of questions.

“That’s been probably the biggest topic is when are they going to hold the sale?” Hansch says.

Many are interested in buying one of Crundwell’s 311 horses, but with a federal investigation still ongoing, there’s no telling when that sale, which could bring Dixon over $7.7 million, will happen.

In the meantime, horsemen say Crundwell’s absence at competitions might help the industry.

“Some people may not have wanted to show or stopped showing because they had a hard time beating Rita,” Hansch says, “Some of those people might come back now.”

“She’s always had work-ethic, up early, up late,” he says, “I wish it hadn’t of happened that way.”

The AQHA has put out a statement on the issue to address horse owners who may have dealt with Crundwell and her horses.

Executive Vice President Don Treadway Jr. says: “Naturally, this is a big issue to touch the industry. I think it’s important to remember that legal proceedings take time, and as AQHA receives information, we will work with those people directly affected.”

According to an AQHA rep, Crundwell is still in good standing with the association and has not been barred from competing.

Read the full AQHA statement here: http://bit.ly/KQ3mMl

Rita Crundwell – Dixon holds off on internal investigation

Weathering the storm of $53 million in missing funds and a federal indictment against former City Comptroller Rita Crundwell, the city of Dixon has decided there will be no internal investigation for now.

“We would not be doing one at this time because I had a meeting with the FBI and the attorneys,” Mayor James Burke says, “Their investigation is not complete so we figured in view of all that, let those things play out, and then at that point we can make a determination whether or not we need to do an internal investigation.”

Since the case broke just over a month ago, Dixon’s mayor and city council have stated over and over again they would be conducting their own internal investigation. The mayor tells KWQC today while they won’t be conducting an investigation now, there are other steps they’re taking to move forward.

“The announcement Monday night was to hire a litigation firm,” Mayor Burke says, “They are going to investigate potential fraud malpractice and other issues involved in litigation.”

The firm will gather information to file a civil suit against Crundwell and any others they find evidence against. The city also has a firm doing a forensic audit to re-audit all records since 1990.

The mayor still believes no one else in city hall was involved, even though he says Crundwell managed to slip through the cracks.

“Everybody liked her,” Burke says, “My thoughts about what she’s done now, it’s hard to square with the person I thought she was.”

Mayor Burke says even though funds are missing, they did do improvements on a new $7million public safety building, a $6.5 million walkway and riverfront area, and $18 million of improvements on the wastewater treatment plant.

However they did make cuts, too. For three years, city employees did not get a raise. The municipal band budget was cut in half and the main street program lost a thousand dollars.

KWQC talked to the Main Street director today, he said they made it work through donations.

The mayor says if the city gets any money back, he’d like to use it to lower fees and expenses for residents.

lessons from dixon

Lessons from Dixon

Dixon, Illinois is 93 miles West of Forest Park. The town of Dixon’s comptroller, Rita Crundwell was recently indicted by Federal authorities for having stolen $30 million no wait $53 million from the town’s coffers over her decades long ‘reign’ as finance chief. I’m loath to quote Dixon’s famous son, Ronald Reagan but Crundwell gives credence to the ‘nine words’ he feared “I’m from the government, and I’m here to help.”

Both Dixon (pop. 16,000) and Forest Park (pop. 15,000) use the City Commission form of municipal government, which dates to the aftermath of the 1900 hurricane that devastated Galveston, Texas. Of 1,300 municipalities in Illinois, approximately 50 (2006 statistics) still have this form of government. Elected officials bear responsibility for facets of government like public safety, finance, public works, etc. A disadvantage of City Commissions is that the officials aren’t professionals trained and experienced to supervise those aspects of city government. This may have actually been evident in Dixon as former finance commissioner Roy Bridgeman lauded Crundwell as an “asset” who “looks after every tax dollar as if it were her own,” … and she did just that!

Crundwell stomped on the ‘checks and balances’ that would’ve revealed her chicanery to other Dixon officials.

Crundwell was able to open a bank account without anyone knowing (because she picked up all the mail and filtered anything related to that account). There was a bank account of city money in the name of an individual rather than the city. No one else ever reviewed a listing of city bank accounts. One person was able to write checks without anyone else approving or signing off on them. A relative performed her job any time she was out of the office.

There were audits but they didn’t pick up on the malfeasance. Audit reports went to the State Comptroller’s office Springfield but seem to have been just ‘filed’. “With the publicity the Dixon story has drawn, the Illinois Government Finance Officers Association is reminding its members around the state to check out their internal controls as well. I certainly hope Forest Park officials are taking heed.

Gary Ghertner Forest Park

Reader Comm

recovery of assets in the Rita Crundwell investigation.

A Chicago law firm was hired by the city of Dixon Monday to help in the recovery of assets in the Rita Crundwell investigation.

Crundwell,the former city comptroller,is accused of stealing 53 million dollars from the city over about two decades.

City leaders voted to hire the law firm of Power Rogers & Smith,P.C. & Devon C. Bruce.

According to the agreement,the firm will “investigate and pursue a claim or cause of action against any person or entities responsible for embezzlement,theft, malpractice,breach of contract,and/or negligent services arising out of work performed and duties owed to the City of Dixon”.