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Judge orders Crundwell retirement funds be sent to government

Money will be applied toward restitution order

DIXON – On Wednesday, a federal judge ordered about $90,000 in retirement fund reimbursements owed to former Comptroller Rita Crundwell be turned over to the government.

Crundwell had contested the inclusion of those funds toward the nearly $54 million restitution she was ordered to pay after she pleaded guilty to wire fraud in November 2012.

U.S. District Court Judge Philip Reinhard had listened to in-court arguments by the federal government, as well as Crundwell's attorney, Ruth Robinson, and reviewed motions filed by the two parties.

He issued his order about a month after the in-court arguments.

The total money is split between two funds. One, through the Illinois Municipal Retirement Fund, has $73,104.50. The other, through Nationwide Retirement Solutions, has $17,461.36.

Unless taxes need to be withheld, the two companies will send a combined $90,565.86 to the Clerk of the United States District Court, Northern District of Illinois. The money then will be sent to the city and applied toward the restitution.

The IMRF also contested the inclusion of the funds it had in its possession. Nationwide didn't, but requested that 20 percent be withheld for taxes.

Crundwell originally objected to the inclusion of the retirement funds herself, by letter, in September. She also asked that the court appoint an attorney to represent her, a request that Reinhard denied later that month.

In November, Robinson took over as Crundwell's attorney and filed a motion in December making the case that the reimbursements shouldn't be turned over to the government for several reasons.

After a December court appearance, Robinson declined to comment on who hired her to represent Crundwell. She didn't return a request for comment Wednesday.

In her December motion, Robinson said that with the money the city has already received from the sale of Crundwell's property and her assets and the settlement with the city's former auditor and bank, Dixon has recovered nearly all of its losses.

Robinson said that restitution was meant to be a civil remedy for the victim, not a punitive judgment against the defendant.

She also said that since the assets weren't identified for forfeiture before Crundwell entered a guilty plea, there was no due process for them to be turned over to the city.

Reinhard disagreed.

"Defendant's argument is baseless," he wrote in his opinion. "Forfeiture and restitution are separate matters."

In the plea agreement, Crundwell acknowledged that forfeiture won't be treated as satisfaction of restitution. Reinhard said the motion by Robinson made an argument to the contrary.

"This argument is completely at odds with the terms defendant expressly agreed to in her plea agreement and clearly contrary to established law," he wrote.

As of Dec. 26, the city has received $9,289,059.39 of the $53,740,394 restitution order.

Other motions

Several other motions that have been filed haven't received decisions from U.S. District Court Judge Philip Reinhard.

Those motions are for the following:

• The $181,690 outstanding balance, plus interest, from the loans then-City Comptroller Rita Crundwell made loans to then-City Engineer Shawn Ortgiesen and his wife, Angela.

• About 700 trophies won during horse competitions, a show clothing collection, and miscellaneous household items such as artwork, hats, bar stools, and framed photographs of her.

• Insurance policy refunds, totaling $18,997.80, held by Kaplow Insurance Agency for canceled policies on horses. A letter from the insurance company to the government shows it had insured about 50 of Crundwell's horses.

• Insurance policy refunds, totalling $11,820, held by Markel Insurance Co. for canceled policies on 11 horses.

• Earnings from the Breeder’s Trust Program of the American Paint Horse Association, totalling $6,066.38. The total includes $3,215.40 for the 2012 program year and $2,850.98 for 2013. The program pays cash dividends for points earned by nominated horses at APHA-approved events, according to the association's website. The program was started to "help offset the cost of showing and to add value to American Paint Horses."

• An account held at The First National Bank In Amboy, with $1,549.95.

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