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Authorities increase amount allegedly embezzled by Dixon, Ill., comptroller to $53 million

Published: Wednesday, May 2, 2012 10:28 a.m. CDT • Updated: Wednesday, May 2, 2012 10:30 a.m. CDT

CHICAGO (MCT) — The small northwestern Illinois town of Dixon. Ill., took another body blow Tuesday as federal authorities charged that its longtime comptroller stole nearly double what prosecutors originally alleged.

In formally indicting Rita Crundwell Tuesday, federal authorities charged she stole more than a whopping $53 million from city coffers over nearly 22 years, up from the initial estimate of $30 million in just the last six years.

Prosecutors are now moving to force the champion quarter-horse breeder to forfeit bank accounts, her horse farm in Dixon, three residences, a luxury motor home and more than 300 horses — all of which she allegedly bought with the stolen city funds.

Crundwell, who served as Dixon’s comptroller and treasurer since 1983, stole the money beginning in December 1990 from a city bank account the current mayor has said he never knew existed. Over the next 21 ½ years, she allegedly stole more than $53 million — on average in excess of $200,000 every month, a staggering sum for a town the size of Dixon, best known as the boyhood home of President Ronald Reagan.

For the first time, authorities alleged that Crundwell concealed all the money going into her own pocket by telling the mayor and City Council that the state was late in its payments to Dixon.

Prosecutors also revealed that Crundwell admitted to FBI agents during her arrest last month in City Hall to using the ill-gotten city money to buy some of her horses and to pay for their upkeep.

With more than half of the money stolen in the last six years, the embezzlements grew more bold over time.

“The whole thing is incredible,” Mayor James Burke said Tuesday in a telephone interview. “There’s been five city councils and at least probably three mayors and three finance commissioners in that period of time ... She got by a lot of people.”

Experts have said numerous financial safeguards broke down or simply didn’t exist in the city of just under 16,000. For one, Crundwell had almost complete control over finances, authorities said. She also picked up the city’s mail to keep city officials from learning about the secret bank account she used to funnel herself the money, investigators alleged Tuesday. When she took a vacation, she had a relative handle the chore, they said.

Prosecutors asked for court permission to auction off 311 horses she boarded at her ranch in Dixon, one run by her longtime boyfriend in Beloit, Ill., as well as at farms around the country, including Texas, Florida and Ohio. In court papers authorities listed all the horses. Topping the list was a horse named “Have Faith in Money.”

The government said it plans to eventually sell the animals and other seized property in order to return some of the funds Dixon has lost.

But in the meantime, the U.S. Marshal Service intends to hire a contractor to feed and care for them.

“Deputy marshals will not be running around feeding horses,” said Chief Deputy U.S. Marshal John O’Malley in Chicago. “We will have professionals do that.”

Crundwell’s arrest two weeks ago sent shockwaves through the horse breeding industry nationwide. Crundwell was considered the most successful breeder in the country with her horses taking home top prizes at shows across the nation, said Gene Graves, president of the American Quarter Horse Association.

Many rival breeders fear that selling off hundreds of some of the finest horses in the nation would depress prices, a problem that Graves likened to the mortgage foreclosure crisis.

“You put that many up for auction at one auction, it’s going to be tough,” he said.

The stunning thefts have led some Dixon residents to call for Burke and the City Council to resign. Some foes gathered for about an hour across from City Hall Tuesday afternoon after hearing the latest allegations against Crundwell, according to the group’s leader, Jennifer De Maria.

“We’re not going to back down,” said De Maria, 36. “We have an agenda and first thing on the agenda is to clean house, to get new elected city officials in there. ... Get people that ... are watching out for our money and not wanting to line their pockets.”

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