• Horse-loving bookkeeper gets almost 20 years for stealing $53 million from Illinois town

    Robert Ray / AP file

    Rita Crundwell, former comptroller for Dixon, Ill., leaving federal court in May 2013. Crundwell was sentenced Thursday to nearly 20 years in prison.

    By Tracy Connor, Staff Writer, NBC News

    A former bookkeeper for a cash-strapped Illinois city, who admitted embezzling $53 million to finance a lavish lifestyle centered on prize-winning horses, was sentenced Thursday to almost 20 years in prison.

    Rita Crundwell, 60, wept as she apologized to the city of Dixon, which couldn't even get its rusted dump trucks replaced or cut grass at the cemetery while its funds were being diverted to a secret account she controlled for two decades, NBCChicago.com reported.

    Crundwell pleaded guilty last year to wire fraud in connection with the scheme. Her lawyer asked for a more lenient sentence of 13 to 16 years, but the judge wasn't in a forgiving mood.

    “You showed a much greater passion for the welfare of your horses than you did for the people of Dixon who you represented,” U.S. District Judge Philip Reinhard said as he shaved just five months off the maximum sentence of 20 years.

    The breath-taking theft underwrote Crundwell's extravagances: two horse farms that produced 52 world champions, a $2 million motor home, a Ford Thunderbird convertible and $340,000 worth of jewelry.

    She sobbed as she left the courtroom -- after a parade of municipal officials testified about she stonily rebuffed their requests for funds with the claim that Dixon, the boyhood home of Ronald Reagan, just didn’t have the money.


    The small city, in farm country about two hours from Chicago, had to borrow $3 million to pay its bills.

    “She saw city employees every day that gone over two years without raises because of her theft,” Mayor Jim Burke said.

    Agency head Michael Stichter recounted how Crundwell rejected his requests for equipment and told him, "If you knew where a money tree was, I'd be willing to get you a dump truck."

    Prosecutors say Crundwell raided Dixon's coffers by creating phony invoices for bogus supplies and services. She used city funds to pay the "bills," and the money went into an account that she had set up under an official-sounding name.

    When she took a long vacation in 2011, her replacement uncovered the irregularities and the FBI was brought in. In recent months, the feds have been auctioning off her assets to reimburse the city.

    But the city won’t recover most of what was lost, and Crundwell’s greed is still costing the government money: the U.S. Marshals service has already spent $1.7 million to care for her beloved horses.

    The Associated Press contributed to this report.

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    This story was originally published on Thu Feb 14, 2013 1:46 PM EST

  • Rita Crundwell case: Guilty plea in theft of $53 million from Illinois city

    Robert Ray / AP file

    In this file photo from May 7, former comptroller for Dixon, Ill., Rita Crundwell leaves federal court in Rockford, Ill.

    By NBC News staff and wire services

    A former longtime comptroller for Dixon, Ill., pleaded guilty Wednesday morning to a federal fraud charge that claimed she stole more than $53 million from the city's accounts and used it to fund her horse-breeding business and lavish lifestyle.


    Rita Crundwell, 59, faces up to 20 years in prison, the Justice Department said in a news release. As part of her plea agreement with the government, Crundwell admitted to one count of wire fraud and engagement in illegal money laundering.

    Since 1990, Crundwell allegedly stole more than $53 million from Dixon, where she oversaw public finances as the city comptroller, by diverting it to an account she had set up for personal use, then misleading city officials. She handled all the city's finances from 1983 until her arrest back in April.

    Authorities say Crundwell used the money to buy luxury homes and vehicles and spent millions on her horse-breeding operation, RC Quarter Horses LLC, which produced 52 world champions in exhibitions run by the American Quarter Horse Association.

    The Justice Department said she will owe restitution to the city of Dixon totaling more than $53.7 million, "minus any credit for funds repaid prior to sentencing."

    "Since the outset of this case, we have used every available means, including both criminal and civil forfeiture proceedings, to ensure the recovery of as much money as possible for the City of Dixon, its residents and taxpayers," said Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois.

    Crundwell's attorney Paul Gazianno said his client's guilty plea saved the government a costly and lengthy trial, The Associated Press reported.

    "Rita, since the day of her arrest, has worked with the government to accomplish the sale of her assets, including her beloved horses, all with the goal of hoping to recoup the losses for the city of Dixon," Gazianno said, according to the AP.

    So far, approximately $7.4 million of Crundwell's assets have been liquidated, including 400 quarter horses, vehicles, trailers, tack and a luxury motor home.

    Crundwell's sentencing is set for Feb. 14. She is allowed to remain free until then, the AP reported.

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    Dixon, with a population of approximately 15,733, is about 100 miles southwest of Chicago. The town's mayor, James Burke, said Crundwell deserves a long prison sentence, the AP reported.

    "We're very happy that she pleaded guilty," Burke said, according to the AP. "There's no feeling sorry for her at all."

    Crundwell has pleaded not guilty to 60 separate but related felony theft counts in Lee County, Ill., the AP reported.

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  • Rita Crundwell case: Ex-Dixon comptroller to plead guilty to theft of $53 million, US says

    Robert Ray / AP file

    Rita Crundwell, former comptroller for Dixon, Ill., leaves federal court in Rockford, Ill., May 7.

    By NBC News staff and wire services

    A former longtime comptroller for Dixon, Ill., now is expected to plead guilty to charges she stole $53 million from the city’s accounts and used it to fund her renowned horse-breeding business and lavish lifestyle, federal prosecutors say.


    Rita Crundwell is scheduled to enter her new plea on Wednesday morning before U.S. District Judge Philip G. Reinhard in federal Court in Rockford, Ill., the Justice Department said in a news release.

    Crundwell, 59, had pleaded not guilty in May to a single federal count of wire fraud.

    Prosecutors allege that since 1990, Crundwell stole more than $53 million from Dixon, where she oversaw public finances as the city comptroller, by diverting it to an account she had set up for personal use, then misleading city officials.

    Authorities say Crundwell used the money to buy luxury homes and vehicles, and spent millions on her horse-breeding operation, RC Quarter Horses LLC, which produced 52 world champions in exhibitions run by the American Quarter Horse Association.

    Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine.

    The federal case is separate from 60 state theft charges filed against her by prosecutors in Illinois.

    Dixon Mayor Jim Burke said in September that the state charges were a backup plan in case the federal trial fell flat.

    “The way we were pushing this was to get some insurance that if it was a slap on the wrist that there would be more from the state,” Burke was quoted as saying by WQAD.com. 

    More than 400 horses and a luxury motor home once owned by Crundwell have been auctioned off by federal authorities, according to media reports. If Crundwell is convicted, much of the money will be returned to Dixon – after the federal government takes its cut for caring for the horses for months, The Chicago Tribune reported.

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

    The Associated Press contributed to this story.

    Prosecutors allege that for years Rita Crundwell, a champion quarter horse breeder, kept a $53 million secret. Rock Center correspondent Harry Smith reports.

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  • City's finance chief accused of looting $30 million; lifestyle included $2.1 million motorhome

    American Quarter Horse Association

    Rita Crundwell is seen with one of her horses at an American Quarter Horse Association event.

    By Miguel Llanos, NBC News

    The chief financial officer of a small Illinois city -- a woman who had a lavish lifestyle that included a $2.1 million motor home and a horse farm -- is under arrest, accused of embezzling $30 million from the city.

    Rita Crundwell, 58, was arrested Tuesday at City Hall in Dixon, Ill., the Chicago Tribune reported, and later charged with wire fraud.

    Paid a salary of $80,000 a year, Crundwell spent large sums to operate her 150-horse Meri-J Ranch, as well as $340,000 on jewelry and $2.1 million on a luxury motor home, the FBI alleges in its criminal complaint.

    "I guess people assumed she was making a ton of money in the horse business," the Tribune quoted Dixon Mayor James Burke as saying about her apparent wealth.

    Burke went to the FBI after an employee covering for Crundwell while she was away discovered an unusual bank account with multiple six-figure transactions. The account was in the city's name but included "RSCDA" as a co-account holder, and that turned out to be Crundwell, the FBI said. Funds from the account had been withdrawn over time.

    Purchases allegedly made by Crundwell with city funds include a $146,000 Kenworth truck, a $140,000 Freightliner truck, a $57,000 Chevy Silverado pickup and a $259,000 horse trailer.

    Dixon, a city of 15,000 and boyhood home of President Ronald Reagan, has an annual budget of less than $9 million a year. The city has had budget cuts over the years, Burke said, but Crundwell argued some of the financial shortfalls were due to funds owed by the state.


    Burke said Crundwell had worked for the city since she was a teenager and was appointed comptroller in the early 1980s.

    The FBI didn't know how the $30 million compares to past cases of public embezzlement.

    "We don’t keep official records or rankings of such things," FBI spokesman Royden Rice told msnbc.com. "Suffice it to say, according to the complaint, this was a very large fraud considering the size of Dixon."

    Burke on Wednesday issued a statement trying to make sense of how so much money could have been embezzled.

    "We realize the main question is how can someone allegedly steal 30 million dollars and get away with it for so long?" he said, and then explained that two accounting firms prepare an annual audit, while the state also reviews city documents. None ever cited "red flags," Burke said.

    He added that the city will try to claim some of Crundwell's assets and it "will be interviewing and retaining a new certified public accounting firm to conduct the annual city audit."

    As for Crundwell, her Meri-J Ranch says on its website that horses bred by her have won 52 world championships.

    Crundwell is well known on the horse circuit, having appeared at countless shows.

    Several YouTube videos by the American Quarter Horse Association relate her success raising and showing horses, and already on Wednesday some viewers were voicing their anger.

    "Rita Crundwell should be banished from all (record) books and be forced to give back all trophies and of course these is no money to give back but she should be banished from all records," wrote one YouTube viewer. "The reserve winners should get their rightful earnings and trophies."

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