Officials: Comptroller stole $30 million
The mayor of Dixon, Ill., pledged new measures to protect the city's finances a day after FBI agents arrested longtime comptroller Rita Crundwell. She is accused of using the money to fund one of the nation's leading horse breeding operations and feed a lavish lifestyle that kept her outfitted with cars and hundreds of thousands of dollars worth of jewelry.
Crundwell is the owner of the Meri-J Ranch on Colley Road in Beloit.
Crundwell is free on a $4,500 recognizance bond. A federal judge barred her Wednesday from selling any property while the wire fraud case proceeds and limited her travel to northern Illinois and to Wisconsin, where she has horse ranches.
Agents searching her home, office and farms in Dixon and Beloit seized seven trucks and trailers, three pickup trucks, a $2.1 million motor home and a Ford Thunderbird convertible—all allegedly bought with illegal proceeds. Authorities also seized the contents of two bank accounts she controlled.
According to a criminal complaint, the siphoning of city funds went undetected for years until another staffer filling in as vacation relief became suspicious and discovered a secret bank account. How an enormous sum—it dwarfed the city's current annual budget of $20 million—could be stolen and escape the notice of a yearly audit left many puzzled.
A Chicago-based corruption watchdog, the Better Government Association, called it a wakeup call for state and local officials to put in place better safeguards, especially in smaller towns that lack rigorous oversight.
"Tens of billions of our tax dollars flow through 7,000 plus units of government in Illinois every year. And we can only watch a few of them," said the association's president, Andy Shaw. "Most of them don't have inspector generals. Most of them don't have auditor generals. Most of them don't have watchdog groups looking closely. … It's ripe for rip-offs."
Dixon, a city of about 16,000 people west of Chicago where Ronald Reagan grew up, was especially vulnerable because Crundwell, who has been comptroller since the early 1980s, had control over all of the city's finances, a common arrangement in smaller cities and towns.
Federal prosecutors say she stole $3.2 million since last fall and misappropriated more than $30 million since 2006.
Between January 2007 and March of this year, she is accused of racking up more than $2.5 million on her personal American Express card—including $339,000 on jewelry—and using Dixon funds to pay back the charges.
Prosecutors say she used $450,000 in stolen funds for operations at her Meri-J Ranch, where she keeps about 150 horses.
Crundwell is one of the top horse breeders in the nation. Her ranch produced 52 world champions, according to the American Quarter Horse Association in Amarillo, Texas, the world's largest equine breed registry and membership organization.
"Rita has owned more world champions than anyone else in our industry," said Jim Bret Campbell, the association's spokesman.
He said she mainly showed her horses in halter classes, competitions where the animals are led by hand rather than ridden and are judged on their beauty. A November photo from the association's 2011 world championship in Oklahoma City shows a smiling Crundwell posing in a white cowboy hat and shirt beside a horse named Pizzazzy Lady.
She is so widely known that the association announced her arrest on its website and promised those inquiring more information when it was available.
Dixon placed Crundwell on administrative leave without pay and named a new interim comptroller.