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Crundwell Admits Embezzling $53M From Dixon Since 1990

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Rita Crundwell, the former comptroller for the western Illinois town of Dixon, is accused of embezzling $53 million from the town. (Credit: CBS)

Rita Crundwell, the former comptroller for the western Illinois town of Dixon, is accused of embezzling $53 million from the town. (Credit: CBS)

Marissa Bailey (CBS) Marissa Bailey
Marissa Bailey is the weekend anchor of the CBS 2 Chicago morning...
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Updated 11/14/12 – 5:59 p.m.

ROCKFORD, Ill. (CBS) – Former Dixon comptroller Rita Crundwell has pleaded guilty to embezzling more than $53 million from the city since 1990, and using the money to fund a lavish lifestyle, including a world champion horse breeding business.

CBS 2’s Marissa Bailey reports Crundwell appeared at the federal courthouse in Rockford on Wednesday, to plead guilty to one count of wire fraud.

Reviewing the 26-page plea deal, the judge asked Crundwell if she committed the crime described in the agreement.

“Yes, your honor,” Crundwell said.

She wiped away tears in court, but didn’t utter a word — or even offer an apology — as she left Wednesday’s hearing.

Her public defender, Paul Gaziano, also declined to answer questions about her guilty plea.

But the question of where all the $53.7 million she stole was all around Curndwell.

Acting U.S. Atty. Gary Shapiro said it was the largest theft of public funds in Illinois history.

Federal prosecutors said she used the money to buy more than 400 horses, and to furnish at least three different homes – including a Florida vacation home – with custom furniture and flat-screen televisions.

Taxpayers angry with Crundwell funding her lavish lifestyle with money stolen from the city showed up at court Wednesday to see Crundwell admit guilt.

Dennis Considine, the Commissioner of Public Health & Safety in Dixon, said, “I’ve known her all my life, and I worked with her face-to-face, and she lied and cheated to us, and I feel betrayed

Dixon resident Joyce Gibson said, “It’s caused a lot of turmoil, a lot of hard feelings, a lot of accusations.”

Dixon resident Jeff Kuhn said, “I would really, myself, like to see some sign of remorse. I haven’t seen it at all.

According to her plea deal, in December 1990, Crundwell opened a bank account for the city of Dixon, which she alone controlled. Over the next 22 years, she used her position as city comptroller to transfer funds from a city money market account into other city bank accounts, and then into the account she controlled.

Crundwell, 59, admitted using those funds for personal business expenses; including her horse breeding business, personal credit cards, and several real estate properties — including homes in Dixon and Florida.

She also created fake invoices from the state of Illinois to show auditors the funds she was using were being spent on legitimate city expenses. She also told city officials that budget shortfalls were the result of the state being late in payment of tax revenues to the city.

Dixon’s mayor reported Crundwell to federal authorities in the fall of 2011 after another city employee took over Crundwell’s duties while she was on extended vacation, and found records of the bank account Crundwell had been using to fund her lavish lifestyle.

Shapiro said Crundwell’s admission of guilt “should serve as a warning, and hopefully a lesson.”

Shapiro, the FBI, and federal marshals said Crundwell’s master plan should have been caught sooner. They also said, despite her seemingly honest image, even a generous hometown girl can tell a lie.

“Public officials who manage their citizens’ money need to trust, if they must, but they need to verify. There was, as far as we can tell, no verification here.”

The U.S. Marshals Service has recovered about $7.4 million from auctions of Crundwell’s horses and equipment from her ranch. An auction to sell her furniture, jewelry, and other personal property is scheduled for the first week in December.

In court Wednesday, prosecutors sought to have Crundwell taken into custody immediately, but the defense argued she is not a flight risk, or a danger to the community, and she was allowed to remain free until sentencing, which was scheduled for Valentine’s Day.

Under Crundwell’s plea agreement, federal prosecutors expect she will face a sentence of 15 years and 8 months to 19 years and 7 months, while the defense is seeking a sentence between 12 years and 7 months to 15 years and 8 months.

Crundwell agreed she owes the city of Dixon restitution for $53,740,394, minus any repayment she will have made before sentencing. She had already agreed to have her assets sold off to pay back Dixon.

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