Ex-Dixon comptroller’s 400 horses to be sold

ROCKFORD — A federal magistrate judge approved the sale Friday of more than 400 horses once owned by Rita Crundwell as part of the government’s wire fraud case against the former Dixon comptroller.

Thirteen saddles, 21 horse embryos and frozen stallion semen were among the other items to be sold under Magistrate Judge P. Michael Mahoney’s ruling. The proceeds of the sale will be used to pay for the horses’ upkeep since Crundwell’s April 17 arrest. Other parties, including those with liens on the horses, are filing claims with the court to recover their funds as well.

Crundwell is accused of stealing more than $53 million in public money during a 20-year tenure as Dixon’s comptroller.

The U.S. attorney’s office alleges she used the money to fund a lavish lifestyle that included a horse farm in Lee County.
Crundwell, who was in court Friday, is charged with a single count of wire fraud and could face 20 years in prison if convicted.

Also Friday, Crundwell’s public defender, Paul Gaziano, asked for more time to review the 17,000 pages of evidence in the case before proceeding. Mahoney agreed and set the next status hearing for July 23 to discuss Gaziano’s progress.

Documentary Film To Be Made About Rita Crundwell

DIXON – An accounting professor and a retired forensic accountant started interviewing Dixon residents Monday morning.

Kelly Pope, an accounting professor at De-Paul University, and Tom Golden, a retired forensic accounting partner with Pricewaterhouse Coopers, are making a documentary film covering the events surrounding the arrest of Rita Crundwell.

The former Dixon comptroller was charged with federal wire fraud in connection with what prosecutors say is the misappropriation of more than $53 million in city funds.

Pope and Golden began filming at Crundwell’s arraignment hearing and began setting up to interview local residents between Monday, June 18.

Judge allows sale of Crundwell horses


ROCKFORD – As lawyers convened behind closed doors Friday, Rita Crundwell stared straight ahead as she waited for a decision on whether her 401 prime quarter horses would be sold before her case is resolved.

While the former Dixon comptroller and her attorneys already had agreed to the sale, there was a brief hold-up Friday as the federal prosecutors consulted with two attorneys representing some of the companies that have been taking care of the horses since Crundwell’s arrest.

The attorneys for the companies – Percott Company of Beloit, Wis., and a horse company and two veterinarians from Texas – want “assurances” that they would have chance to recoup some of their costs from sale proceeds.

Crundwell purchased the horses, along with other properties and assets, with city funds, according to federal prosecutors.

Crundwell, 59, is charged with one count of federal wire fraud as part of a scheme to misappropriate more than $53 million since 1990, according to prosecutors.

Crundwell will be back in court July 23 in both her civil and criminal case.

During a 30-minute hearing Friday, Magistrate Judge P. Michael Mahoney gave the U.S. Marshals Service the go-ahead to sell the horses, as well as 21 embryos, 13 saddles, and frozen stallion semen from eight horses.

Read the order allowing the sale.
Rita Crundwell Horse Order 12-cv-50153

A similar request to sell five of Crundwell’s properties and a $2.1 luxury motor home was granted late last month.

Marshals have been caring for the horses, properties and other assets seized from Crundwell after her April 17 arrest at City Hall.

Marshals did not return calls or emails seeking comment Friday.

Assistant U.S. Attorney Joe Pedersen told Mahoney that selling the horses now will “be in the best interest of all parties involved.”

In a motion filed Thursday, Pedersen wrote that maintenance costs are “burdensome,” especially because some of the mares are pregnant or recently gave birth.

Prolonging the sale may also devalue the horses, Pedersen said.

Pedersen told Mahoney that it will take 60 to 90 days for marshals to bid out contracts to companies to conduct the sales.

All proceeds, minus costs incurred by the Marshals Service in setting up the sale, will be held in an escrow account managed by marshals until the case is resolved, Pedersen said.

Percott and Texas horse breeders Brock and Kristi Allen of Allen Equine, and veterinarians A. Barry Wood and Hartman Equine Reproduction Center, filed motions in late May to intervene in the civil suit.

In the motions, attorneys wrote that they have incurred substantial costs in caring for the horses, which have resulted in a lien of more than $150,000.

The attorneys argued that in the event the horses would be sold, they intend to make a claim from the proceeds to recover those costs.

Crundwell’s federal defender, Paul Gaziano, told Mahoney that he still is going over 17,000 pages of discovery provided by prosecutors, 6,000 of which were provided within the past month.

Mahoney told Gaziano to file any pretrial motions before Crundwell’s next court date.

After Friday’s hearing, Crundwell and her second attorney, Kristin Carpenter, walked briskly past a throng of reporters and into a small black car; a black trash bag had been placed over the license plate.

Crundwell’s horses soon up for sale?

DIXON – City and law enforcement officials met Tuesday with federal agents to make a “preliminary plan” in the event that a federal judge allows the sale of former Dixon comptroller Rita Crundwell’s nearly 400 horses, according to Lee County Sheriff John Varga.

No such order or motion had been filed as of late Tuesday.

“Obviously, no one can do anything without a court order,” Varga told Sauk Valley Media. “[The feds] wanted to give us a heads-up on what to expect.”

However, the U.S. Marshals Service, which was given the go-ahead last week in federal court to sell some of Crundwell’s assets, now said they will “delay” the sale of two of her properties until they receive further order from the court in regard to the horses.

Crundwell, 59, is charged with wire fraud. Prosecutors say she misappropriated more than $53 million in taxpayer money over two decades to pay for her horse operations and her “lavish lifestyle.”

According to court documents, Crundwell told federal agents that she used some city money to buy and maintain her horses.

Following her April 17 arrest, the U.S. Marshals Service took over five of Crundwell’s properties, which include her Brick Road home and horse ranch in Dixon, along with the horses scattered across the country.

On May 30, Judge Philip G. Reinhard granted an agreed motion between federal prosecutors and Crundwell to sell the properties and a $2.1 million 2009 Liberty Coach motor home.

Marshals Service spokeswoman Lynzey Donahue said in an email Tuesday that the sale of two of Crundwell’s Dixon properties which house multiple horses will be delayed, “as the Marshals Service has received no authority at this point to sell any of the approximately 400 horses believed to be owned by Crundwell.”

According to court documents, Crundwell has about 241 horses in Dixon.

Donahue and U.S. Attorney spokesman Randall Samborn have declined to say when or if a motion to sell the horses will be filed in federal court.

Varga, along with Dixon Mayor Jim Burke and Police Chief Danny Langloss, met with federal agents Tuesday to discuss a possible sale if prosecutors seek to seize the horses prior to a conviction.

Langloss did not want to comment on the meeting, and Burke could not be reached for comment.

Federal officials requested the meeting to talk about the logistics of a large public auction if a judge orders the horses to be sold, Varga said.

Varga said his department, with help from Dixon Police, would be in charge of traffic and crowd control, while marshals handle the auction.

Varga said there was no talk of when a sale could happen or how much the horses may sell for.

Marshals are using existing farm labor and have hired a contractor to manage the care of the horses, Donahue said Tuesday.

Marshals also are evaluating business operations to “ensure the livestock is maintained in the same or better condition as when they took custody and that the care of the animals meets industry practices,” Donahue said

Dixon Files Suit Against Auditors Over Embezzlement

The City of Dixon has filed a civil complaint against some of its auditors for not catching any of the alleged $53 million dollar embezzlement by the city’s former comptroller, Rita Crundwell.

Prosecutors say over a 20 year period, Crundwell diverted the money to an account she set up for personal use, spending it on luxury homes, jewelry, vehicles and a horse-breeding operation. She has pleaded not guilty to a federal charge of wire fraud and is awaiting trial.

Now, the city claims two Sterling accounting firms it hired to audit the books over the past five years, failed to catch the embezzlement. In the complaint, the city says Samuel S. Card, CPA, P.C. and Janis Card Company, LLC were negligent and wants to recoup the city’s losses.

In addition to the accounting firms, the city also named two banks–Fifth Third Bank and US Bank–as respondents in discovery. That means the city wants access to documents and other information to determine if anyone else should be named in the suit.

Company Caring for Crundwell’s Horses Wants to get Paid

BELOIT (WIFR) — A company that’s caring for some of Former Dixon Comptroller Rita Crundwell’s horses on her ranch in Beloit wants to be reimbursed for its troubles.

And that means it wants to stop a federal court from selling the animals. Purrcott Company says it has spent at least $150,000 boarding, training and caring for 60 horses.

Purrcott has intervened in the civil lawsuit against Crundwell to get its money back.

Feds seek to sell certain Crundwell assets

ROCKFORD – The selling of former Dixon Comptroller Rita Crundwell’s assets to recoup money for the city could begin soon, pending a federal judge’s ruling.

Prosecutors have filed a motion asking to be allowed to sell certain Crundwell properties and possessions –including five land parcels and a luxury motor home –before the outcome of legal proceedings against her.

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.”

Those obligations include paying mortgages on one property, maintaining all properties and paying utility bills, according to the motion.

The U.S. Marshals Service also is caring for Crundwell’s prime quarter horses, which are scattered across the country.

Marshals took over the properties following Crundwell’s April 17 arrest.

Pedersen further wrote that selling some of the properties now will “increase the amount, after satisfaction of obligations, that will be available for forfeiture to the United States upon conviction.”

Crundwell, 59, is charged with one count of wire fraud as part of a scheme to misappropriate more than $53 million in taxpayer money over two decades to maintain her “lavish lifestyle,” according to prosecutors.

Federal prosecutors also say Crundwell used city money to fund her horse operations and to purchase the properties and multiple vehicles.

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She is due back in court June 15. Judge Philip G. Reinhard is overseeing her case.

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

All proceeds from the sale, minus certain verifiable costs, will be put into an escrow account and maintained by the Marshals Service pending further action by the court.

Specifically, prosecutors want to sell properties located at 1679 U.S. Route 52, Dixon; 1556 Red Brick Road, Dixon; 1403 Dutch Road, Dixon; 80 acres of land in Lee County; and a home at 821 E. Fifth St., in Englewood, Fla.

They also want to sell a $2.1 million 2009 Liberty Coach motor home.

U.S. Attorney spokesman Randall Samborn declined to say whether this is a typical move in federal fraud

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Dixon Pension Money Used To Pay Bills?

While the state of Illinois struggles to meet its obligations for pension funding, it has been revealed that the comptroller for the City of Dixon may have dipped into the pension funds for city police and firefighters.

Rita Crundwell is accused of stealing $53 million from the City of Dixon over a period of 30 years. She was arrested last month, but the investigation is shedding light on more alleged misappropriations.

The two interim comptrollers who were hired after Crundwell was fired have discovered that she transferred money out of the police and fire pension funds to pay city bills. They claim that about $100,000 was removed from the retirement funds and transferred into the general fund, which was used to pay bills.

The investigation shows the money was taken out over the past couple of years, but was later put back into the pension accounts.

Crundwell has pleaded not guilty to one count of federal wire fraud. A status hearing is scheduled for June 15th