Texas boarder, vet to get share of sale proceeds

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ROCKFORD – As ousted Dixon comptroller Rita Crundwell’s criminal case inches forward, some headway was made Wednesday regarding her large herd of quarter horses.

Federal prosecutors and an attorney for one of two interveners in the civil suit seeking to sell Crundwell’s horses say they’ve reached an agreement regarding liens on 54 horses.

Brock and Kristin Allen of Allen Equine Services, and veterinarians A. Barry Wood and Hartman Equine Reproduction Center, all of Texas, say they have liens in excess of $150,000 for boarding and caring for Crundwell’s horses there.

The agreement essentially recognizes the liens and says they will receive a portion of the proceeds from selling the horses once the case is resolved. How much was not specified.

Some details of the agreement still are being worked out; it might be filed today or Friday, Assistant U.S. Attorney Scott Paccagnini said.

Joel Hutori, attorney for the Texas interveners, declined to comment Wednesday.

A status hearing will be held Oct. 10.

Crundwell, 59, is charged with federal wire fraud as part of what prosecutors say was a scheme in which she misappropriated more than $53 million of Dixon’s money since 1990.

They say she used the money to fund her horse operations and her “lavish lifestyle.”

On May 1, the same day she was indicted, prosecutors filed a lawsuit seeking to sell Crundwell’s 401 horses and other items that they say were bought with illegal funds.

The following month, Magistrate Judge P. Michael Mahoney gave the U.S. Marshals Service the OK to sell the horses, 21 embryos, 13 saddles, and frozen semen from eight horses.

The bulk of the herd will be sold Sept. 23 and 24 during at an auction at her ranch at 1556 Red Brick Road south of Dixon.

The out-of-state horses will be sold online Sept. 11 and 12. The proceeds from the sale, minus the costs incurred by the marshals and liens, will be given to the city once the case is resolved.

The Meri-J Ranch in Beloit, Wis., which has boarded horses for Crundwell since the 1990s, also has been allowed to intervene in the case.

It, too, claims liens in excess of $150,000 from caring for 60 horses.

Its attorney, Rodney Kimes of Rockford, said Wednesday that he has spoken with prosecutors and anticipates a similar resolution.

Under the civil forfeiture statute, “innocent owner’s” interest in seized property will not be forfeited. An “innocent owner” is one who did not know of the illegal activity that led to the forfeiture.

The interveners in the case say they had no knowledge of Crundwell’s activities, according to court documents.

Crundwell, dressed in a white button-down shirt and black pants, showed little emotion at the short hearing, while attorneys discussed the sale of her horses.

Her public defender, Paul Gaziano, told Mahoney that he recently received another disk of evidence in the case and that he still is reviewing the more than 17,000 pages of discovery.

Mahoney gave Gaziano until the Oct. 10 status hearing to file pretrial motions.