Tom Kirvan
Legal News, Editor-in-Chief
Early in my newspaper career, I had the misfortune of reporting on two embezzlement cases, the likes of which a certain small town had never seen.
One involved the fleecing of a local chamber of commerce by its trusted treasurer, while the other saw the coffers of a school booster program looted by a supposed do-gooder.
Years later, a youth hockey program in the Ann Arbor area was cross-checked into the proverbial boards when its longtime bookkeeper was found to have funneled nearly $1 million into her bank accounts at the expense of a long-planned building project for the local nonprofit.
Such financial misdeeds, which left many innocent victims in their wake, pale in comparison to the embezzlement caper pulled by the city treasurer of Dixon, Ill., the boyhood home of President Ronald Reagan, a proponent of “trickle-down economics.”
Rita Crundwell, treasurer and controller of Dixon from 1983 to 2012, must have believed in the economic theory, employing it to the utmost over her 29-year financial reign in the city of 15,000 residents.
There she perpetrated what is believed to be the largest municipal fraud in U.S. history, embezzling approximately $53.7 million from the city over a 22-year period.
Her fall from grace is captured on film in the documentary, “All the Queen’s Horses,” an award-winning production available on Netflix. It is a spellbinding look at unbridled greed, the kind that fed a championship horse breeding operation and lavish lifestyle for the hometown girl.
Crundwell began her accounting career while still in high school, joining the municipal ranks at Dixon City Hall as a work-study student. Some 13 years later, she was appointed treasurer, annually earning high marks for her “stewardship of city finances,” including praise in 2011 from one city commissioner who said, “She looks after every tax dollar as if it were her own.”
Funny that he used such a phrase, especially after it was discovered months later that she had buffaloed city officials, bankers, and auditors for more than two decades.
According to law enforcement officials, Crundwell’s scheme began in 1990 when she opened a secret bank account labeled RSCDA, short for Reserve Sewer Capital Development Account. As the only signatory, Crundwell reportedly would deposit city money into that account and another bogus fund, concocting false state invoices that would serve as the vehicle for her check writing sham.
The shell game that she played cost the city an average of $2.5 million annually, according to authorities, money that allowed the $80,000 a year city employee to buy fancy cars and trucks, a second home, a luxurious million-dollar motor home, and hundreds of high-priced quarter horses.
But like any house of cards, Crundwell’s came tumbling down in the fall of 2011 when one of her subordinates uncovered the dubious “RSCDA” account, alerting the city’s mayor to the deception and setting in motion an FBI investigation that ensnared the unsuspecting culprit six months later.
In November 2012, Crundwell pleaded guilty to a single count of wire fraud, while also admitting to money laundering. She was ordered to make $53.7 million in restitution and was sentenced in 2013 to nearly 20 years in federal prison.
Of course, like any good-for-nothing embezzler, Crundwell failed to open a “savings account” for her ill-gotten gains, preferring instead to burn through nearly $45 million of the city’s money, leaving approximately $9 million to be reclaimed at an auction of her assets.
For the balance, the city turned its sights on the municipality’s outside auditors as well as Fifth Third Bank, holder of the accounts, contending that both defendants ignored a slew of red flags in the embezzlement scheme. In the fall of 2013, the parties reportedly agreed to a $40 million settlement with the city.
But even in modern day math terms, the numbers will never add up for the residents of Dixon, who may well take some solace in the immortal saying that “you need three things in life – a good doctor, a forgiving priest, and a clever accountant.”
