An Illinois city’s financial controller funded a lavish lifestyle, including a top quarter horse breeding operation with more than 150 horses, through misappropriating millions of dollars, US federal authorities allege.
Rita Crundwell, 58, of Dixon, a city of about 16,000 people in Lee County, is accused of misappropriating more than $US30 million in city funds.
FBI officers arrested her on Tuesday. They allege she has been taking public money from the city’s coffers since 2006, and that more than $US3.2 million has been taken since last fall alone.
Warrants were executed at her home and office, horse farms in Beloit, Wisconsin, and another in Dixon, which is in Lee County. Funds in two bank accounts have been frozen.
Among items seized were seven trucks and trailers, three pickup trucks, a $US2.1 million motor home, and a Ford Thunderbird convertible, all of which were allegedly purchased with illegal proceeds.
Crundwell’s annual salary in her city role as its comptroller, which she has held since the early 1980s, is about $US80,000.
Patrick Fitzgerald, US attorney for the northern district of Illinois, and Chicago-based FBI special-agent-in-charge Robert Grant, confirmed the arrest of Crundwell on a federal charge for allegedly defrauding the Dixon of more than $US3.2 million in public funds since just last fall.
The federal criminal complaint alleges that Crundwell has misappropriated more than $30 million in city funds since 2006 to finance her own lavish lifestyle.
Crundwell handled all finances for the city.
Dixon Mayor James Burke reported Crundwell to law enforcement authorities last fall after a city employee assumed Crundwell’s duties during Crundwell’s extended unpaid vacation.
After reviewing bank statements from September 2011 through to March 2012, the FBI expanded the probe and began reviewing the city’s finances dating back to 2006.
The investigation is continuing.
According to the complaint, Crundwell receives four weeks of paid vacation annually and took an extra 12 weeks of unpaid vacation in 2011.
In October last year, while Crundwell was away from work, a Dixon employee who served as her replacement requested all of the city’s bank statements.
After reviewing them, the employee brought the records of a particular account to Mayor Burke’s attention.
The September 2011 statement for that account showed three deposits totaling $US785,000, as well as 84 checks drawn totaling $US360,493, and 40 withdrawals totaling $US266,605.
The city’s council has numerous bank accounts, including a capital development fund.
Between September 2011 and February 2012, about $US2,783,912 in various tax funds were electronically deposited into one of the city’s accounts.
Crundwell is alleged to have caused these funds to be moved around to other bank accounts held by the city, and eventually transferred most of it into the capital development fund account.
Between September 2011 and March 2012, in her capacity as comptroller, Crundwell allegedly wrote 19 checks totaling $US3,558,000 on the capital development fund account payable to “Treasurer”, and deposited these checks into an account listing an entity called RSCDA as the joint account holder.
She is then alleged to have taken $US3,311,860 from the RSCDA account by checks and online withdrawals, using only $US74,274 for city operations.
Crundwell is alleged to have used the money for her own personal and business expenses, including about $US450,000 relating to her horse farming operations, $US600,000 in online credit card payments, and $US67,000 to purchase a 2012 Chevy Silverado pickup truck.
After discovering Crundwell allegedly had recently transferred $US3,558,000 in city funds to the RSCDA account, the FBI obtained additional bank records showing that between July 2006 and March 2012, Crundwell allegedly deposited a total of $US30,236,503 in city funds into the RSCDA account, and paid out more than $US30 million for her own personal and business expenses.
The complaint alleges that she used fraudulently obtained funds to make additional purchases, including a 2009 Liberty Coach Motor Home for $US2,108,000, a 2009 Kenworth T800 tractor truck for $US146,787, a 2009 Freightliner Truck for $US140,000, a 2009 Chevrolet Silverado pickup truck for $US56,646, and a 2009 Featherlite Horse Trailer for $US258,698.
Between January of 2007 and March of 2012, Crundwell incurred charges of more than $US2.5 million on her personal American Express credit card account, including more than $US339,000 on jewelry alone, and allegedly used Dixon funds to pay the entire amount of charges.
Wire fraud carries a maximum penalty of 20 years in prison, and a $US250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater.
Records allege use of the fund include Crundwell paying $US450,000 in expenses related to her horse-farming operations, including $US200,000 of expenses for feeding, insuring and providing veterinary care for her horses.