DIXON – Rita Crundwell may have started stealing from the city nearly 2 years before she opened the secret bank account through which she filtered money, according to new court documents filed Tuesday.
She took at least $25,000 from Dixon's Sister Cities Association account between August 1988 and May 1990, the documents said.
Further, Crundwell did not cooperate immediately with investigators: She lied about how much money she took and when when initially interviewed by FBI agents.
Although she started stealing nearly $54 million in 1991, she first told investigators she started embezzling in 1999 or 2000 and had taken only about $10 million, the documents said.
Prosecutors will present those details to a federal judge Thursday at Crundwell's sentencing, where the 60-year-old faces up to 20 years in prison for wire fraud.
Slated to testify as part of a victim impact statement are Mayor Jim Burke; Finance Commissioner Dave Blackburn; Police Chief Danny Langloss; Dan Mahan, superintendent of the Waste Water Department; former Finance Commissioner Roy Bridgeman; Mike Stichter, superintendent of the Street Department; and Curt Phillips, superintendent of public property.
Crundwell, who pleaded guilty to wire fraud in November, admitted opening the Reserve Sewer Capital Development Account, known as the RSCDA, in December 1990; she started siphoning money into it in January 1991.
That first year, she stole $181,000; that amount steadily increased to millions of dollars a year, according to documents.
While ultimately up to the judge, federal court sentences are based on guidelines that take a variety of factors into account, including the nature of the crime, how much the defendant cooperates, and the criminal history of the defendant.
The federal probation department conducts an investigation into the defendant's financial, criminal and other personal history, and compiles a pre-sentence report, the recommendations of which both sides can argue.
According to court documents, the probation department has determined that Crundwell should serve between 12 1/2 to nearly 16 years.
The defense is asking for a sentence on the low end of the guidelines.
The prosecution, which wants a term closer to 20 years, today filed a notice of intent to present evidence that they think justifies a higher sentence.
Assistant U.S. Attorney Joe Pedersen wrote in the notice that he intends to call FBI Special Agent Patrick Garry, who interviewed Crundwell during her arrest at City Hall on April 17, to testify at the hearing.
Garry examined bank statements from the city, including those from the Sister Cities account, which the city opened to receive charitable contributions for the program that fosters goodwill between Dixon and several international cities.
Crundwell took at least $25,000 from that account between August 1988 and May 1990. She deposited checks made payable to the city, then wrote some of the checks to herself, using them to buy money orders to pay personal expenses, Pedersen said.
Garry also will testify about the circumstances of her arrest and her statements to agents.
Crundwell's federal public defender, Paul Gaziano, filed a sentencing memorandum last week asking for leniency.
The day she was arrested, Crundwell quickly admitted that she was the only person involved in the thefts, she continued to cooperate in the investigation – often at a moment’s notice – and helped marshals liquidate her assets, Gaziano wrote.
In his response, filed Monday, Pedersen said Garry confronted Crundwell on April 17, told her that he was aware of the RSCDA account, that there was "no question" Crundwell had taken a substantial amount of money, and that the only question left was why she did it.
Crundwell admitted opening the account for her own personal use, said she began taking money in 1999 or 2000, and said she thought she may have taken $10 million, Pedersen wrote in the motion.
He acknowledged Crundwell's cooperation, but said there is no evidence she ever intended to end her scheme had she not been arrested.
"These facts do not support her contention that she immediately began the rehabilitative process and do not weigh in favor of a sentence at the low end of the guidelines," Pedersen wrote.
As part of Crundwell's plea agreement, she has agreed to pay full restitution to the city, although it's not likely she will be able to do so.
The U.S. Marshals Service has sold most of her assets, including homes, horses, furnishings and vehicles, for about $11 million.
Crundwell also has agreed to turn over her Illinois Municipal Retirement Fund contributions, about $73,000, along with a check made out to her in excess of $5,000, and two notes for loans made to two city officials.
Prosecutors also want to seize a trust fund opened in her name in May 1986, and $2,162.08 returned to her from the cancellation of her insurance on her properties.
The amount of money of the loans and trust fund have not been disclosed.
Reporter Derek Barichello contributed to this report.
Crundwell sentencing FAQs
Ousted Dixon Comptroller Rita Crundwell, 60, faces up to 20 years in prison at her sentencing Thursday for federal wire fraud.
The probation department has determined that based on the offense and other factors, she should serve 12 1/2 to nearly 16 years. The prosecution wants something closer to 20.
Whatever her sentence, she will have to serve at least 85 percent. There is no parole in the federal system, only a limited amount of "good time" credit.
Here are FAQs on what to expect at sentencing:
– Is the judge required to follow the recommended sentence?
No. The guidelines are advisory, not mandatory. The judge will take a number of factors into consideration, such as the nature of the offense itself, the amount of the loss to the victim, her criminal history, and whether she takes responsibility for her actions.
He could give her less than the minimum recommendation, but he cannot exceed the 20-year maximum.
– Crundwell has been free on a $4,500 recognizance bond since April. Will she be taken into custody Thursday?
Juliet Sorenson, a former U.S. attorney and now a clinical assistant professor of law at Northwestern University, said federal defendants not in custody typically are given time to turn themselves in.
That's partly because the Federal Bureau of Prisons needs time to do an evaluation to determine where a defendant should be sent to serve the sentence, which typically takes a month to complete, she said.
– Where might Crundwell be sent?
In a sentencing memorandum filed last week, her attorneys asked that she be sent to a facility close to Beloit, Wis., where her longtime boyfriend, Jim McKillips, lives.
According to the BOP's website, an inmate typically serves their time at a prison within a 500-mile radius of their release residence. If an inmate is placed at a facility farther away, it generally is because of specific security, programming, or population concerns.
The Waseca Federal Correctional Institute, a low-security women's prison in Waseca, Minn., is about 314 miles away from Beloit.
– What about the state charges?
Crundwell was indicted in September on 60 counts of theft in Lee County for stealing more than $11 million from the city since January 2010. If convicted, the Lee County sentence would run concurrent to the federal sentence.
In December, her Lee County public defender, Bob Thompson, was granted more time to consider whether to file a motion seeking to dismiss the state charges on the grounds that the "acts and dates" contained in both cases may constitute double jeopardy.
What they are arguing
In numerous court documents filed recently, prosecutors and defense attorneys outlined their reasoning for how long Rita Crundwell's sentence should be.
In her pre-sentence report, the federal Probation Department recommends 12 1/2 to nearly 16 years.
Defense: Crundwell should be sentenced to the low end of the sentencing guidelines.
– Age: Crundwell, 60, likely will spend the rest of her life in prison if she's sentenced to the maximum 20 years.
– Post-arrest conduct: Crundwell admitted her guilt to FBI agents in April and to a federal judge in November. She assisted in the investigation by "quickly admitting" that she was the only person involved in the scheme and assisted in the liquidation of her assets to give back to the city.
– Criminal history: Other than the offense at hand, Crundwell's record is clean, which is an indication that she will not commit another crime.
– Rehabilitation: Crundwell has begun the rehabilitation process by cooperating with investigators and can abide by the terms of the orders of the court. She has "established" her concern and remorse for the city by her assistance in the restitution process.
Prosecution: Crundwell should get more time.
– Criminal history: While she does not have any prior record, she did engage in a criminal scheme that lasted more than 20 years.
– Damage: The scheme not only deprived the city of funds, but it also caused a disruption in government function and caused citizens to lose faith in its officials.
– Cooperation: Prosecutors acknowledge Crundwell's cooperation with the sale of her assets. They took that cooperation into account, however, when they allowed her to plead guilty to only one count of wire fraud and did not file additional charges, essentially capping the sentence at 20 years. She also merely was returning proceeds that did not belong to her.
– Taking responsibility: While she did admit to the scheme to investigators, Crundwell initially lied to investigators about the amount of money she took and the time frame. She only admitted to the totality of the scheme after she was confronted by federal agents.