Ex-Comptroller Rita Crundwell Pleads Guilty to Stealing $53M from Illinois City

PHOTO: Rita Crundwell, former comptroller for Dixon, Ill., leaves court in Rockford, Ill., Nov. 14, 2012.

A former comptroller for a small town in Illinois pleaded guilty to embezzling $53 million from city accounts to feed a lavish lifestyle that included a nationally known horse-breeding operation.

Rita Crundwell, 59, pleaded guilty Wednesday to wire fraud in federal court for siphoning off taxpayer dollars to her secret bank accounts while comptroller of Dixon, Ill., the boyhood home of former President Ronald Reagan.

Crundwell spent most of the stolen cash on extravagant items such as a $2 million custom RV, a Florida vacation home and her most prized possession – a world-class horse breeding farm.

"If nothing else, what we have in this case is an object lesson in how not to manage public funds," Gary Shapiro, the acting U.S. Attorney for northern Illinois, said. "This is a crime that should never have been allowed to occur."

All of Crundwell's items are up for auction by the U.S. Marshals, including 400 horses. Only $7 million has been recovered so far.

"Since the day of her arrest, Rita has worked with the government to accomplish the sale of her assets, including her beloved horses -- all with the goal of helping to recoup the losses for the city of Dixon," Public Defender Paul Gaziano said.

The question many residents of Dixon are now asking is how did she get away with the scam for so long? Dixon Mayor James Burke said Crundwell was the only person who controlled the city's finances and funneled public money to her secret, private accounts.

"There were no red flags that we were able to, or did notice here at city hall," Burke said.

Authorities say Crundwell was eventually taken down after going on vacation in October 2011, and her replacement at work called the bank to clear up some confusing paper work and stumbled upon her secret back account. Crundwell was arrested in April by the FBI.

Prosecutors say she began stealing money in 1990 to support her extravagant way of life. As the town's comptroller since the early 1980s, Crundwell earned an annual salary of $80,000, according to the complaint filed in April in the Northern District Court of Illinois.

"There are all kinds of things that I wish I would have done differently," Mayor Burke said.

Many residents in the working-class town are in shock that she was able to get away with it for so long.

"Nobody really had any idea that she was doing what she did. Now that we look back on it, watching all the stuff grow out there at the ranch and her home and her lifestyle and everything else, it's funny we didn't put two and two together," Dixon resident Stan Wolzen said.

Crundwell is facing up to 20 years in prison and will be back in court on Feb. 14.

ABC News' Susanna Kim contributed to this report.

Join the Discussion
blog comments powered by Disqus
 
You Might Also Like...