Sale of Crundwell’s horses Sept. 23-24
DIXON – How do you sell more than 400 horses spread across 22 farms in 13 states, from Arizona to Connecticut, Florida to North Dakota, and areas in between?
That was the challenge facing the U.S. Marshals Service 7 weeks ago when a federal judge gave it the task of caring for the horses that belonged to indicted Dixon Comptroller Rita Crundwell.
That responsibility is "remarkable and unprecedented" for the marshals service, U.S. Marshal Darryl McPherson told a group of reporters Friday.
"My objective is to provide sound care for the horses while keeping costs under control to be able to return the greatest amount to any of the victims of the alleged crime at the conclusion of this process," he said.
During a news conference Friday at Crundwell's ranch, 1556 Red Brick Road south of Dixon, McPherson announced that a live auction would be held there on Sept. 23 and 24. The 80-acre ranch boards the bulk of Crundwell's 401 horses.
Read the U.S. Marshals Service "Statement of Work for Disposal of Horses."
Bidders can see the horses by appointment only during a 3-day viewing period. Dates have not been set.
An online auction will be held Sept. 11 and 12 for many of Crundwell's horses being boarded across the country. Bidders also can make appointments to see those horses.
Prospective buyers also will be able to bid online during the live auction via a live webcast.
No private sales will be made for the horses or other assets that have been approved for sale, said Jason Wojdylo, chief inspector for the marshals' asset forfeiture division.
"Every taxpayer has the ability to participate if they choose," he said. "We'll try and maximize the return the best that we can."
On May 1, a federal judge ordered the marshals to care for the horses. That's the same day federal prosecutors indicted the 59-year-old Dixon woman on a single count of wire fraud.
Prosecutors say Crundwell had misappropriated more than $53 million since 1990 to finance her world-class horse business and a "lavish lifestyle."
The sale will be managed by Professional Auction Services of Round Hill, Va., which will prepare the horses for sale, coordinate security and traffic control with law enforcement, provide reasonable shelter for bidders and spectators, and promote the sale.
On its website, the company will post pictures of and information about the horses, as well as accept bids during the auction periods. The site is professionalauction.com.
Mike Jennings, who owns the company with his brother, Tim, told reporters that the company had handled 330 auctions over a 34-year span and averages about 15 to 17 auctions a year.
Jennings told reporters Friday that he had already been contacted by people all over the world, including Australia and Europe, who are interested in Crundwell's horses.
Jennings said the dates of the live auction were chosen because September is an "extremely busy month" for large horse shows in the quarter horse industry. Shows will be going on in Texas, Tennessee, and Iowa.
"We wanted to take advantage of the proximity of those people coming in from all over the world," he said.
Crundwell's performance horses and other related items will be sold on Sept. 23, while the halter horses will be sold Sept. 24, he said.
"Obviously, in the herd of 400 horses, you'll see a broad variety of values," Jennings said. "World Champions and top show horses with proven records will be at the top of the scale."
Those types of horses could fetch between $200,000 and $300,000 apiece, Jennings said. He also said a number of horses in the herd could go for $100,000 to $200,000.
A lot depends on how the horse "family" has performed in major venues, Jennings said.
The company, which was awarded a "zero-dollar contract," will receive a buyer's premium, meaning a commission that will be tacked on to the price of each horse sold.
Jennings said the company's take will be 10 percent. Anything over $250,000 will fetch the company an 8 percent premium.
Jennings said he does not believe that selling so many horses at once will "flood the market" or cause a "depression in prices."
"There's not very many world champions for sale at any given time," he said. "It heightens people's interest to get horses they may never have gotten before."
Jennings said he expects to see bidders from "all walks" of the horse industry.
One concern he's heard, he said, is the fear that buyers will sell the horses for slaughter for food.
The marshals will require each winning bidder to sign an agreement not to do that, Jennings said.
Jennings said he would bring in a crew in the next 2 weeks to photograph the horses and "take them to the beauty shop" to get them ready for the auction.
Since the marshals took control of the horses, 82 foals have been born. Eight horses – four of which are colts – died from a variety of illnesses, McPherson said.
McPherson said he had been assured by experts that the eight deaths were not unusual and were consistent with those reported last year when the herd was under the control of Crundwell.
The case has been challenging for the marshals, Inspector Wojdylo said.
"Never before have we managed this size of livestock in so many outlying areas, ..." he said.
Wojdylo added: "We're taking that responsibility very seriously. The welfare of the horses is our utmost concern."
Marshals also have been given the green light to sell Crundwell's 2009 Liberty Coach luxury motor home, her ranch, and four other pieces of real estate.
The properties will not be sold until the horses are sold.
Earlier this week, marshals announced that the lone bidder of the motor home was rejected because it came in under the $1 million minimum.
Crundwell bought the motor home for nearly $1.58 million in July 2008 and had it customized to her liking, according to Wojdylo.
Wojdylo said marshals were taking a "step back" on the process and are exploring other ways of disposal.
Video from news conference
Jason Wojdylo, chief inspector for the marshals' asset forfeiture division
Mike Jennings, co-owner of Professional Auction Services of Round Hill, Va.
Details of the sale
According to documents posted by the U.S. Marshals Service, the contractor who is selling Rita Crundwell’s horses must:
– Advertise the horses and assets in at least one national print publication and via contractor-operated Internet website; a link also will be posted on the marshals’ site.
The contractor also must advertise with appropriate horse industry associations, including the American Quarter Horse Association, American Paint Horse Association, and the Pinto Horse Association of America.
– Create a sale catalog that includes each horse’s identification information, description, pedigree, and at least one photo that will be available in print and online.
– Work with local law enforcement to provide security, traffic control, and crowd containment during the auction.
– Provide off-site parking for participants and spectators and on-site parking for media and law enforcement.
– Provide reasonable shelter and adequate sanitation stations during the preview and the auction.
– Hold three 8-hour preview days by appointment only.
– Have a knowledgeable quarter horse industry rep on site to answer questions.
– Use a licensed auctioneer.
– Provide a report to the marshals service that includes the asset ID, horse name, chip number, buyer’s name, purchase price, and buyer’s premium view within 10 days after the auction.
– Utilize an online simulcast to allow bids to be taken online during the live auctions, through a website with security measures to protect against hacking, and disclose on its website its backup plan for receiving bids should the website become unavailable.
– Make video and audio recordings of the auction, with tapes provided to marshals within 10 business days after the sale.