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

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

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2 replacements in place for Dixon.

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notguilty@ritacrundwell.com

Rita Crundwell, the high-profile Quarter Horse breeder accused of embezzling millions of dollars from the coffers of a small Illinois town, has pleaded not guilty to the charge against her.

Crundwell owns RC Quarter Horses LLC and operates the Meri-J Ranch in Beloit, Wis., and another horse farm in Dixon, Ill. She has been a leading Quarter Horse breeder having earned Leading Breeder Award honors at eight American Quarter Horse Association World Championship Shows. In connection with the case, Crundwell’s 311 horses are now in the care of the U.S. Marshals Service.

In April Federal Bureau of Investigation (FBI) agents arrested Crundwell and charged her with one count of wire fraud after a federal grand jury in Illinois returned an initial indictment accusing Crundwell of misappropriating $30 million in funds from the town of Dixon, where she had served as city comptroller since the 1980s. Further investigation resulted in an expanded indictment accusing Crundwell of allegedly misappropriating a total of more than $53 million from Dixon over more than 20 years.

A spokesperson for the U.S. Attorney’s Office for the Northern District of Illinois said that on May 7 Crundwell appeared in U.S. District Court in Rockford, Ill., where she pleaded not guilty to the wire fraud charge.

Crundwell’s attorney Paul Graziano, assistant defender for the Federal Defender Program, declined comment on the case.

While the case is pending, Crundwell remains free on bail.

DIXON, Ill. &#8212 The former financial officer for the small northern Illinois city of Dixon stole millions of dollars more than originally thought, federal prosecutors said Tuesday as they announced plans to try to seize her trucks, boats, horses and even unborn foals she owns.

A federal grand jury on Thursday returned an indictment charging Rita Crundwell with one count of wire fraud for allegedly siphoning more than $53 million from the city of 16,000 since 1990 into a secret account she controlled. Prosecutors originally alleged she had taken $30 million.

Prosecutors contend she used the money to pay for a lavish lifestyle as she worked as comptroller in Dixon, the boyhood home of the late President Ronald Reagan.

Prosecutors filed a civil lawsuit Thursday seeking 311 registered quarter horses and dozens of foals that are expected to be born this spring. A news release announcing the suit said prosecutors plan to sell the horses and “apply the proceeds toward restitution to the city of Dixon.” Prosecutors said the horses are subject to forfeiture because Crundwell either bought or “maintained them with criminal fraud proceeds.”

At the same time, the indictment seeks criminal forfeiture of two residences, a horse farm in Dixon and a home in Florida. It also seeks a $2.1 million motorhome, more than a dozen trucks, trailers, motorized farm equipment, a pontoon boat, and cars, including a 1967 Chevrolet Corvette roadster. The indictment also seeks the forfeiture of more than $224,000 in cash from two bank accounts.

Federal prosecutors allege Crundwell created phony invoices that she characterized as being from the state of Illinois. She then allegedly put that money from a city account into another account, which she repeatedly used for personal use.

According to the news release, she said she used the state’s much-publicized dire financial straits to her advantage, telling city officials that the state was late in payments as a way to conceal her transfers of funds and her spending.

If convicted, Crundwell faces a maximum sentence of 20 years in federal prison.

The former comptroller will be arraigned May 7 in U.S. District Court in Rockford. Crundwell’s attorney was not in his office Tuesday and in a recorded message he said he would not be back in the office until Wednesday. Crundwell could not be reached; the phone rang unanswered at a listing for her.