DIXON – The city’s former auditor says Fifth Third Bank did not share its knowledge of the secret account Rita Crundwell used to steal nearly $54 million.
For that, CliftonLarsonAllen is suing the bank in a cross-claim, according to recent court documents.
Both are defendants in a lawsuit filed by the city of Dixon blaming them for Crundwell’s theft.
Clifton’s cross-claim seeks damages from Fifth Third, regardless of the outcome of the lawsuit with the city, according to the filing.
Clifton argues that without knowledge of the secret account, it could not conduct an accurate audit for the city.
Clifton attorneys say the secret account, also known as the “RSCDA” account, was listed as a joint account with the city for its entire existence.
Crundwell wrote at least 179 checks to “Treasurer” from the city’s capital development fund to the RSCDA account, all at Fifth Third Bank. She then used millions of dollars transferred into the account for her personal use.
Clifton’s attorneys said that on June 8, 2004, Fifth Third responded to a request to confirm the city’s all known bank accounts in a document signed by the bank’s authorized representative, Andrea Latta. It did not mention the existence or the balance of the RSCDA account.
Latta again signed a written confirmation on May 2, 2005, again without disclosing the secret account, Clifton’s attorneys said.
Clifton’s attorneys said the secret account was not revealed until at least Nov. 2, 2010, when the bank responded to a request from Samuel S. Card, a Sterling accountant who conducted Dixon’s audit from 2005 up until Crundwell’s arrest in April 2012. His accounting office also is named in the city’s lawsuit.
The account had a balance of $142,000 at that time.
Clifton’s attorneys said “auditors would rely on the responses to the annual requests for confirmations of all city bank accounts.”
Disclosure of the account could have allowed Clifton to investigate the account further, leading to the detection of the theft, according to documents.
Also, the Bank Secrecy Act of 1970 allowed Fifth Third Bank to investigate the account for fraud, and Clifton attorneys said it did not do so.
Fifth Third has until later this month to respond to the suit. The next status hearing is 10 a.m. July 16 at the Lee County Courthouse.