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

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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.


Rita crundwell pleads guilty

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November 14, 2012 (ROCKFORD) — Her schemes to defraud the City of Dixon went on for more than 20-years. Rita Crundwell pleads guilty to federal charges Wednesday morning. Giving up her rights to a fair trial.

Rita Crundwell, 59 walked out of federal courts. She was surrounded by T.V. news cameras and reporters, but silent as questions are shouted at her.

All for a crime, prosectuors say, should have never been allowed to happen in the first place.

“For over a period of more than 21-years, which is certaintly at least as far as I know is the largest theft of public funds in Illinois history,” said Acting U.S. Attorney Gary Shapiro.

The comptroller of Dixon admits she took more than 50-million dollars from taxpayers, and using it to support her lavish lifestyle and horse breeding operation.

“Her actions were sophisticated. It was a good scheme, but at the same time, they weren’t so sophisticated that now this is my opinion, a little bit better oversight to some of this could have been brought to our attention sooner,” said Acting Special F.B.I agent William Monroe.

U.S Marshals worked for several months to seize and to liquidate all of her assets, which includes including 400 horses.

They recovered around $7.4 million dollars through on site and online auctioning of her assets.

“I like to report to date that we have sold all those horses in a large quanity of tact and equipment; as well as 11 vehicles, which includes a customized luxurious motor home,” said U.S. Marshal Darryl McPherson.

But more assets such as real estate property and jewerly still needs to be auctioned off.

Shapiro hopes this crime will serve as an example for public officials that when it comes to public money there needs to be trust and verification.

“But it should serve as a lesson to public officials in other cities small and large and I say this recognizing its significance for the town of Dixon,” said Shapiro.


How did she do it? – Rita Crundwell

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From Chicago Magazine.  Full article can be found here

It was time. The three men, in standard-issue FBI suits and ties, arrived

at Dixon City Hall just after nine on the morning of Tuesday, April 17. They chatted breezily with Jim Burke, the mild-mannered, silver-haired mayor, who smiled and nodded from behind a cluttered desk in his office on the second floor. But for the badges tucked into the men’s wallets and the guns holstered on their belts, the gathering might have looked like a few insurance salesmen debating weekend tee times.

As the small talk petered out, however, a chill settled over the room. Burke looked up at the men. “Are we ready?” he asked.

The lead agent, Patrick Garry, nodded. “Yes. Let’s bring her in.”

Burke reached for the phone and punched in the number for the comptroller. “Rita, would you mind stepping into my office for a minute?”

“Sure,” Rita Crundwell answered brightly.

For five long months—ever since Dixon’s city clerk, Kathe Swanson, had stumbled upon a curious bank statement from an even more curious bank account—Burke had been helping the feds unravel an embezzlement scheme so vast and so brazen it seemed almost inconceivable. Tens of millions of dollars had been siphoned from the tiny rural city’s operating budget. The money was being dumped into a mysterious account and allegedly spent on everything but city business: jewelry, fancy clothes, a custom motor coach, boats, property in Florida, luxury cars, hundreds of the finest horses this side of Amarillo. And that was only what the feds had found in their cursory first look at the city’s cooked books.

Most stunning of all was the identity of the person suspected of masterminding the scheme: Rita Crundwell, a woman whose parents were the kind of humble, hardworking community pillars upon which Dixon’s reputation was built, a woman who had been the town’s comptroller for more than three decades, as trusted and efficient as a church tithe collector.

It was Burke who had taken the dubious bank statement to the FBI office in Rockford back in October 2011. Agents instructed him to hold his tongue while they investigated. As the months passed, he woke often in the night. Was this really happening?

The mayor’s thoughts turned to Crundwell’s hobby. Everyone in town knew that Crundwell, 59, who is divorced and has no children, owned and showed horses. The local paper reported on various championships she won, honors that bestowed a measure of pride on the city.

But very few in Dixon had the faintest idea of the operation Crundwell was running or of the magnitude of the double life she was leading. By day, she was a modest municipal worker with a high-school education; by night, she was a diamond-bedazzled high roller, the doyenne of a world that was a million miles in glamour and several million dollars in wealth from the cornfields and cattle farms of Illinois.

Week after week, Burke would pass Crundwell in the upstairs offices—a warren of cubicles with pile carpeting and cheap wood paneling—and pretend that nothing was wrong, trading “good mornings” with the woman he’d been told was robbing the city blind and smiling as she did. Week after week, Swanson, the city clerk who had flagged the telltale bank statement, swallowed her disgust as she watched the coworker she had once considered a friend breezing around the building.

Now the day of reckoning was at hand.

“Hi,” Crundwell chirped, sticking her head through the door.

“Morning,” Burke said. “Would you mind coming in?”

Garry wasted no time. “I’m with the FBI,” he said, displaying his badge. “We’d like to ask you some questions.”

From his desk, Burke studied Crundwell. If she has an ounce of shame, he thought, it will show on her face. When he saw her expression, the unwavering calm smile, he was stunned. “I was looking right at her,” Burke recalls. “And the look on her face never changed. Absolutely never changed.”

Continued at

From Chicago Magazine.  Full article can be found here


Horses set for auction

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Hopes are high that some of the horses will go for six figures, especially since the horses up for sale come from a history of champions.

“This case is remarkable, it’s quite frankly unprecedented,” said chief inspector for the US Marshal Services Jason Wojdylo.

It’s the biggest Seizure Wojdylo has ever managed. “We’re dealing with world champions here, were dealing with a lead breeder in the quarter horse industry,” said Wojdylo. “And I think there’s something to be had with these horses.”

Rita Crundwell was arrested for wire fraud and accused of stealing more than 53-million dollars while she worked as comptroller for the city of Dixon. Now, the US Marshal Services is hoping to get some of that money back by selling off 400 horses and 5 properties.

“Our objectives are to maximize the return on all the horses,” said Wojdylo.

The horses are spread across 13 states on 22 farms and people in Dixon want them all sold.

“I would like to see everything go,” said Martha Martinez.

One look at the hundreds of trophies in Crundwell’s trophy room on her Dixon ranch shows how influence she has had in the quarter horse industry.

“The trophies and the trophy room as well as the sheer volume of horses speak to the value of the heard that we have,” said Wojdylo.

The auction is drawing international attention and has Dixon’s mayor hoping for a decent return.

“I’m hoping that we can recover a substantial amount of money,” said Dixon mayor Jim Burke.

Mayor Burke says he found out about what Crundwell is accused of doing five months before her arrest, a secret that kept him up at night.

“I’d wake up thinking about it,” said Burke. “And one time I remember thinking ‘is this really happening?'”

With an auction date now set, and the US Marshal Services hoping to recover as much of the city’s money as they can, Mayor Burke is just left wondering how someone who seemed so trusting could trick such a close nit town to fund her lavish lifestyle.

“What I would wonder about is how anybody could do that, knowing that city money was paying for all that,” said Burke.

The multi-day live auction will be held on September 23rd and 24th at Crundwell’s ranch located at 1556 Red Brick Road in Dixon. There will also be an online sale on September 11th and 12th.




Dates announced for auction of Rita Crundwell’s horses.

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WREX- The U.S. Marshals Service is moving forward with the auction of horses owned by former Dixon comptroller Rita Crundwell.

A live auction will be held at Crundwell’s farm in Dixon on September 23 and September 24. Performance horses will be auctioned off on September 23, and halter horses will be auctioned on September 24. The farm is located at 1556 Red Brick Road in Dixon.

An online auction will be held on September 11 and September 12. The auction will be held at www.professionalauction.com. Times for both auctions are not yet available.

Interest in the horses is coming from as far as Australia and Europe. According to the auctioneer, 29 world champion horses will be up for auction, with some top breeding stallions garnering over $300,000. However, there will also be horses that will probably sell for just a few hundred dollars.

Crundwell has been accused of stealing over $53 million from the City of Dixon from 1990 to early 2012. She was arrested in April 2012 and charged with one count of wire fraud. Accusers say Crundwell used the money she allegedly stole to fund a lavish lifestyle for herself that included running a nation-wide horse breeding operation. She pled not guilty to wire fraud in May 2012

Judge allows sale of Crundwell horses

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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.

Feds seek to sell certain Crundwell assets

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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.


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?

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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

12-cv-50153 Rita Crundwell case petition to intervene

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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