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Stealing headlines: Crundwell top story of 2012

Longtime Dixon comptroller’s theft from city draws national attention

DIXON – One word best describes the story that grabbed the most headlines in the Sauk Valley in 2012: Incredible.

Dixon was thrust into the national spotlight this year when what officials say is the largest municipal fraud in U.S. history was revealed by federal prosecutors.

Longtime Comptroller Rita Crundwell, a nationally renowned horse breeder, was led out of City Hall in handcuffs April 17 and charged with stealing more than $30 million since 2006.

That number jumped to nearly $54 million taken since December 1990 when federal prosecutors indicted her May 1 on a single county of wire fraud.

The 59-year-old Dixon woman pleaded guilty to the charge Nov. 14, and agreed to pay the city $53,740,394 in restitution.

Crundwell, free on bond, will be sentenced Feb. 14 and faces up to 20 years in prison.

Her federal defender, Paul Gaziano, said after the change-of-plea hearing that his client has worked with the government from the day of her arrest to complete the sale of assets “all with the goal of hoping to recoup the losses for the city of Dixon.”

“I think the people of the city of Dixon ought to know that,” he said.  

Crundwell did not object to the liquidation of most of her assets, including her herd of more than 400 quarter horses.

Crundwell was known worldwide as a breeder of champion horses and often showed them at horse competitions across the country.

In September, the U.S. Marshals Service had an online auction and a multi-day live auction at Crundwell’s Red Brick Road home in rural Dixon. Both auctions brought in about $5.43 million.

The top seller was Good I Will Be, a three-time world champion stallion, for $775,000.

Subsequent online and live auctions to sell off much of her other property has brought in nearly $8 million.

On Sept. 20, Crundwell’s legal troubles grew worse. A Lee County grand jury indicted her on 60 counts of theft of government property in excess of $100,000 

Prosecutors say she stole more than $11 million from the city since January 2010.

Her attorney, Lee County Public Defender Bob Thompson, said he is waiting for the federal case to be resolved before deciding to file a motion to dismiss the state charges. She will be back in court March 4 for a status hearing.

The scandal left the city scrambling to clean up the mess left behind by Crundwell.

The City Council fired her less than a week after her arrest and began the search to find a replacement.

The city hired two retired finance directors through a temp firm, GovTempsUSA, to assess the city’s financial condition and recommended new internal controls. 

In August, they hired Paula Meyer, dean of business services at Sauk Valley Community College, to fill the newly created position of finance director. 

They also hired Wipfli, a regional firm with an office in Dixon, to reconstruct the past 6 years of the city’s audits. They also will do the city’s audits for the next 3 years. 

In June, the city sued its auditors, Samuel S. Card, CPA, P.C., and Janie Card Company, LLC, the Sterling companies that have done the audits for the past 5 years.

The suit also named CliftonLarsonAllen, who formerly did the city’s audits, as well as two banks where the city had accounts – Fifth Third Bank and US Bank – as respondents in discovery.

The city last week filed an amended suit naming CliftonLarsonAllen as a defendant. A settlement has not yet been reached nor has a trial date been set.

A case management conference is scheduled for Jan. 11.

There’s little doubt the Crundwell saga will be commanding even more headlines in 2013.

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