Fired Dixon Horse Breeding Comptroller Indicted, Civil Suit Filed to Seize Quarter Horses

A press release from the U.S. Attorney’s Officde:

FEDERAL INDICTMENT CHARGES FORMER DIXON COMPTROLLER RITA CRUNDWELL WITH ENGAGING IN $53 MILLION FRAUD SINCE 1990

U.S. files lawsuit seeking civil forfeiture of 311 quarter horses in addition to seeking criminal forfeiture of seized assets

ROCKFORD — The former comptroller of the City of Dixon, Ill., Rita A. Crundwell, was indicted today for allegedly fraudulently obtaining more than $53 million from the town since 1990 and using the proceeds to finance her horse breeding business and lavish lifestyle.

Patrick Fitzgerald

A federal grand jury returned a single-count indictment charging Crundwell with one count of wire fraud, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-In-Charge of the Chicago Office of the Federal Bureau of Investigation.

Since Crundwell was arrested on April 17 and accused of misappropriating more than $30 million since 2006, further investigation resulted in the indictment’s expanded allegation that the fraud exceeded $53 million and spanned more than two decades.

Crundwell, 59, of Dixon, who served as comptroller since 1983 and handled all of the city’s finances, was released on her own recognizance on April 18. She will be arraigned at 10:30 a.m. on May 7 before U.S. Magistrate Judge P. Michael Mahoney in U.S. District Court in Rockford.

The indictment seeks criminal forfeiture of $53 million as well as numerous assets that were seized from Crundwell when she was arrested.

On a parallel track, the United States today filed a civil lawsuit alleging that 311 quarter horses owned by Crundwell are subject to civil forfeiture because she purchased and/or maintained them with criminal fraud proceeds.

The government will seek eventually to sell the horses and apply the proceeds toward restitution to the City of Dixon.

“The government is pursuing both criminal and civil forfeiture proceedings to ensure that every available tool is being used to recover proceeds of the alleged fraud in order to recoup as much money as possible for the City of Dixon, its residents and taxpayers,” Mr. Fitzgerald said. The investigation is continuing, he added.

Dixon, with a population of approximately 15,733, is located about 100 miles southwest of Chicago.

Crundwell owns RC Quarter Horses, LLC, and keeps her horses at her ranch on Red Brick Road in Dixon and at the Meri-J Ranch in Beloit, Wis., as well as with various trainers across the country.

In addition to 311 registered quarter horses, dozens of foals are expected to be born this spring.

As part of the civil lawsuit, the government requested a pretrial restraining order that will secure the government’s interest in the horses and allow officials to take necessary steps to ensure the animals’ health and well-being, including veterinary and dietary care, which has been ongoing.

The U.S. Marshals Service is expected to hire a contractor to manage the horses.

The indictment seeks criminal forfeiture of

  • two residences and
  • the horse farm in Dixon,
  • a home in Englewood, Fla.,
  • a $2.1 million luxury motor home,
  • more than a dozen trucks, trailers and other motorized farm vehicles,
  • a 2005 Ford Thunderbird convertible,
  • a 1967 Chevrolet Corvette roadster,
  • a pontoon boat,
  • approximately $224,898 in cash from two bank accounts, and
  • other assets allegedly purchased with fraud proceeds.

Many of these assets were seized when Crundwell was arrested, and the government today requested a restraining order on the real estate that is allegedly subject to criminal forfeiture.

According to the indictment, on Dec. 18, 1990, Crundwell opened a bank account in the name of the City of Dixon and RSCDA, known as the RSCDA account.

Between December 1990 and April 2012, Crundwell used her position as comptroller to transfer funds from the Dixon’s Money Market account to its Capital Development Fund account, as well as to various other city bank accounts.

Crundwell allegedly repeatedly transferred city funds into the RSCDA account and used the money to pay for her own personal and private business expenses, including

  • horse farming operations,
  • personal credit card payments,
  • real estate and
  • vehicles.

As part of the fraud scheme, Crundwell allegedly created fictitious invoices purported to be from the State of Illinois to show the city’s auditors that the funds she was fraudulently depositing into the RSCDA account were being used for a legitimate purpose.

To conceal the scheme, Crundwell told the mayor and City Council members that the state was late in its payments to the city, when, in fact, she knew that she had fraudulently transferred the funds for her own use, the indictment alleges.

Wire fraud carries a maximum penalty of 20 years in prison, and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is represented in the criminal case by Assistant U.S. Attorney Joseph C. Pedersen, and in the civil case by Assistant U.S. Attorney Scott Paccagnini.

The public is reminded that an indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to an indictment by a federal grand jury and a fair trial at which the government has the burden of proving her guilt beyond a reasonable doubt.


Comments

Fired Dixon Horse Breeding Comptroller Indicted, Civil Suit Filed to Seize Quarter Horses — 6 Comments

  1. Well…. doesn’t say much for the City of Dixon elected officials and the city auditors over the last 22 years.

    Isn’t a governmental body mandated by law to have a yearly audit?

    One would think that since 1990 there would have been one smart one in the bunch that should have caught this.

    But then again it was only $53 million taxpayers dollars.

    You would think that even someone in Dixon would have wondered about and questioned the lavish lifestyle of a city employee, but then again her husband may have been an Illinois politician!

  2. “Isn’t a governmental body mandated by law to have a yearly audit?”

    Tell that to Grafton’s own “Lawsuit Linda” Moore.

    Moore time in office = Moore time WITHOUT an audit.

    Cal COULD be blogging about that aspect of his pal Linda . . .

    NOPE, he keeps spinning and spinning and spinning.

  3. I did, of course, write an article about the outside CPA’s report to the board.

    You can find it here: http://mchenrycountyblog.com/2011/08/26/auditors-present-draft-fiscal-year-2010-grafton-township-budget-found-nothing-untoward-in-the-audit/

    Part of the article read:

    So, what did the auditors find?

    “Nothing was missing,” Thermen explained in answer to a question from Trustee Rob LaPorta about the transfer of large amounts of money between township bank accounts.

    Where there big problems?

    “We really found nothing untoward in the audit,” Thermen said.

    He complained about the “laborious” effort it took to read the minute and review the legal fees, but said the financial portions of the audit “went as smoothly as could be expected.”

  4. Spin all you want with your blog Cal.

    Grafton’s Moore writes all the checks, deposits all the monies, gives all the information to the auditor, won’t let the auditors talk to the board.

    Interesting!

  5. As I indicated in comments when the story first broke; I was shocked when I thought the figure was $30M, now at $53M words can’t describe whatever it is that I’m feeling/thinking. If I didn’t know any better I would think that the town literally handed Ms. Crundwell the checkbook and said “…have at Rita. Cut those checks as fast as you can. Git er done!” But seriously, I previously posted the below comment elsewhere but it is fitting that I share it here as well. It also pertains to public corruption that the citizenry should be aware of.

    —————————————————

    Next stop Gainesville, Fla. (i.e. “Gator Country”). “Why specifically?”, you ask.

    Because in Alachua County, within recent months, numerous and egregious violations of law have been committed that warrant multiple criminal prosecutions and other severe government sanctions. These crimes have had all types of deleterious effects including, but not limited to, once again placing the integrity of Florida’s election results (for 2012) in jeopardy. A few of the things that are central to this issue are:

    1
    David P. Kreider [Mr. Kreider, a proven criminal, is a corrupt Alachua County Court judge. This criminally-corrupt judge also happens to be both (a) one of the circuit’s former prosecutors and (b) a former Division Chief for the State Attorney’s Office.]

    2
    Robert Roundtree, Chief Judge for Florida’s 8th Judicial Circuit (he recently replaced the embattled Martha Lott who resigned from her chief judge post subsequent to becoming embroiled in this scandal which has started to implode; her resignation was announced on 04/09/2012 and was reported to have gone into effect on 04/05/2012)

    3
    Spencer Mann, Chief Investigator for the State Attorney’s Office of Florida’s 8th Judicial Circuit

    4
    William “Bill” Cervone, State Attorney for Florida’s 8th Judicial Circuit

    5
    The conspiracy / scandal related to the “Gibson Case”

    6
    The two irrefutable reports and extensive corroborating evidence that is in the possession of agencies, including those within Florida’s 8th Judicial Circuit (and the aforementioned Spencer Mann and Chief Judge’s office). The comprehensive reports and evidence span a total of more than 100 pages and in-depthly detail criminal activities carried out under the color of law by criminal/judge David P. Kreider and various other co-conspirators.

    http://www.complaints.com/2012/march/14/Corrupt_Judge_David_P._Kreider_now_taints_the_ele_264712.htm

    This is the gateway to serious corruption and a major cover-up attempt.

  6. i bet she paid off the aqha judges too!!!!!!!!!!!

    if she did they would have to pay it back to the city of dixion.

    thats maybe how she won all those awards like she did for so long.

    she paid them off good !!!!!!!!!!!!!!!!!!

    maybe a few thousand dollars ????

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