19 Years, 7 Months for Biggest Municipal Theft in US History

19 Years, 7 Months for Biggest Municipal Theft in US History
February 14, 2013

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)

Rita Crundwell of the small town of Dixon, Ill., has been sentenced to nearly 20 years in prison for stealing almost $54 million from the city to finance a lavish lifestyle that included ownership of farms with hundreds of show horses.

In a Rockford, Ill., courtroom on Feb. 14, U.S. District Court Judge Philip Reinhard handed down a sentence of 19 years, seven months in prison. Last November Crundwell, 60, pleaded guilty to wire fraud and admitted stealing $53.7 million. Authorities believe it could be the largest theft from municipal government in U.S. history.

"You showed much greater passion for the welfare of your horses than the people of Dixon you represented," Reinhard told Crundwell. "You lived the lifestyle befitting a wealthy person, and you did this on monies that weren’t yours."

Her thefts from Dixon, the boyhood home of President Ronald Reagan, began in 1990, according to the FBI, and continued until her arrest by federal agents in April 2011. The thefts total nearly $3,376 for every man, woman and child in this town of 15,700 in northwest Illinois.

City Services Suffer

For years the city budget was strained. Among other things, in recent years the city put off road and streetlight repairs and kept the municipal swimming pool closed to save money. Crundwell explained the money problems by blaming a weak economy and late payments from the State of Illinois.

The news of Crundwell’s arrest staggered city officials and residents. Crundwell was a totally trusted city employee who began working at city hall part-time while she was still a teenager. She became city treasurer and comptroller and had total control of money coming in and going out.

At the time of her arrest, Crundwell’s salary was approximately $83,000 a year. Yet during her tenure at Dixon city hall she became internationally known in equestrian circles as the owner of the Meri-J Ranch in Dixon and Beloit, Wis., which breeds and shows champion quarter horses. She also owned farms in several other states. In addition to owning some of the nation’s top show horses, Crundwell also owned millions of dollars of other property, including a multi-million dollar luxury motor home, expensive jewelry, vacation property in Florida, luxury automobiles, and pricey furs.

Her horses and other property have been seized and are being sold. So far the sales have brought in $11 million, most of which is going toward restitution. Officials doubt the rest of her property will come anywhere close to fully reimbursing the city.

Vacation Trips Her Up

In addition to buying expensive property with Dixon’s tax dollars, Crundwell also took lengthy exotic vacations, which proved to be her downfall.

While she was on vacation in 2011, a city employee who had assumed Crundwell’s duties in her absence reviewed the city’s bank statements and became suspicious about hundreds of thousands of dollars of recent deposits and withdrawals from a certain account. That employee took the records to Mayor James Burke, who had no idea the account existed. He then contacted the FBI.

The bank records showed the primary account holder as the City of Dixon but listed a joint account holder as RSCDA, and the checks written on this account listed the account holder as “R.S.C.D.A., C/O Rita Crundwell.”

During the six months the FBI had Crundwell under investigation, she allegedly used more than $3.2 million of city money for her personal and business expenses, “including approximately $450,000 relating to her horse farming operations, $600,000 in online credit card payments, and $67,000 to purchase a 2012 Chevy Silverado pickup truck,” according to the FBI.

Federal agents documented at least 179 fraudulent invoices showing payments to the Illinois Department of Transportation. City auditors never caught the fraud. The city is suing multiple audit firms that handled the city’s audits and failed to detect the fraudulent invoices and transactions.

Crundwell still faces 60 state charges of felony theft, each of which carries a potential sentence of up to 30 years in prison on conviction. Her attorney is trying to have those charges dropped, though, claiming prosecution would amount to double jeopardy.

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)