Thursday, February 14, 2013 3:55 pm
Bookkeeper who stole $53M gets nearly 20 years
By DON BABWINAssociated Press
"You stole an astronomical amount of money from the city, you crippled the city," U.S. District Judge Philip Reinhard told Rita Crundwell, as he sentenced her to 19 years and 7 months in federal prison - just shy of the maximum 20 years. She was handcuffed and led away sobbing after he ordered her into custody immediately, saying he was concerned she could have money hidden and flee.
Crundwell, 60, pleaded guilty to wire fraud for embezzling money from the city of Dixon from 1991 until her arrest last April. She tearfully apologized in the Rockford federal courtroom.
"I am truly sorry to the city of Dixon, to my family and my friends," Crundwell said in court, her voice quivering.
For more than two decades as comptroller for Dixon, a northern Illinois community best known for being the site of Ronald Reagan's boyhood home, Crundwell siphoned city funds to pay for properties, vacations, luxury cars and a horse-breeding operation that became nationally renowned.
"You showed a much greater passion for the welfare of your horses than you did for the people of Dixon who you represented," the judge said before imposing a sentence that means Crundwell will not be eligible for release until she is 77 years old.
Crundwell's apology marked the first time she spoke publicly about her massive theft. Before she got her turn in court, she had to listen to people testify about the damage she had done.
Heads of various departments took turns describing how Crundwell's scheme devastated the city, forcing them to put off needed repairs and equipment purchases. Police didn't get radio equipment and there wasn't enough money to mow the grass at the cemetery.
Michael Stichter, long-time superintendent of Dixon's streets department, said miles of roadway could not be resurfaced and aging vehicles could not be replaced. He said Crundwell told him repeatedly that the city simply did not have the money.
Officials in Dixon remain baffled by Crundwell's scheme, which averaged more than $5 million a year during the last few years.
"She drove on the streets that didn't get repaired or replaced because of her theft," Mayor Jim Burke told the judge. "She saw city employees every day that had gone over two years without raises because of her theft."
Assistant U.S. Attorney Joseph Pederson said Crundwell "callously sat quietly at budget meetings year after year while the city had to make painful cuts."
Pedersen described Crundwell's "extravagant lifestyle" and showed the judge pictures of expensive vehicles, boats and jewelry. He said she criss-crossed the nation attending horse shows and acting every bit the wealthy horse owner, while Dixon had to borrow $3 million to pay city bills.
"She even paid for a mariachi band at a horse show," Pedersen said.
Pedersen said after the hearing that Crundwell would have continued stealing if she hadn't been caught.
"There was no evidence she was going to stop," he said.
Crundwell still faces 60 separate but related state felony charges for theft in Lee County. She has pleaded not guilty to those charges.
Crundwell's public defender requested a sentence of about 13 years, which would have been on the lower end of sentencing guidelines. But prosecutors sought closer to the maximum sentence of 20 years, agreeing with Pedersen's chacterization of Crundwell's "20-year crime spree."
The judge also ordered Crundwell to pay full restitution - $53.7 million - as per the terms of her deal, but prosecutors said they only expect to recover about $10 million of that. Over the past several months, U.S. Marshals have been auctioning off Crundwell's assets, including houses, horses and jewelry.
Officials said that while money will continue to come in from the auctions, the total is not expected to climb. That's because the government's costs have climbed as well, with Jason Wojdylo of the U.S. Marshals Service saying it cost $1.7 million to care for hundreds of Crundwell's horses.
After the hearing, Randall Samborn, a spokesman for the U.S. Attorney's Office, said if other cases are any indication, the search for Crundwell's assets will continue for years.
"We've had cases where we dig for assets 20 years after the defendant is released from prison," he said.
Prosecutors say Crundwell began depositing Dixon's money in a secret bank account in January 1991 and continued doing so until her arrest in April 2012, months after the FBI began monitoring her transactions. Her scheme began to unravel when she went on an extended vacation in 2011 and the person filling in for her stumbled upon her secret account, prompting the mayor's call to the FBI.
Crundwell began working for the city, which is about 100 miles west of Chicago, when she was 17 and began overseeing its finances in the 1980s. Prosecutors say residents, many of whom who work in factories and on grain farms, came to trust her.
Besides the luxury homes and vehicles she bought over the years, Crundwell 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.