Depths of Dixon, Illinois Embezzlement Scandal Probed

In California, a great deal of time is spent lamenting the unquestionably wrong siphoning of more than $6 million from Bell. But what if the pilfered sum had been nearly nine-times greater?

In Illinois, the rural town of Dixon is home to half as many people as Bell. But one unscrupulous city employee turned the town into her personal credit card – diverting roughly $53 million from city coffers since 1990. She used the money to finance her own horse empire, breeding, showing, and selling national champion quarter horses.

In essence, Rita Crundwell is accused of creating a closed circuit banking system, where she served as tax collector, auditor, and controller. Using a series of maneuvers on paper, Crundwell was able to hide her massive spending habit from city officials and residents. In five months, the FBI alleges that Crundwell pocketed – through a secret bank account she established in 1990 – $3.2 million, nearly three times more money than the $1.1 million that was spent on the police department.

She might have gotten away with it, but her horse, travel, and luxury lifestyle pushed her to take more and more. In the final six years of her alleged crime spree, Crundwell took $30 million, while the previous 16 years of swindle amassed her $16 million.

The account, which was discovered largely by accident, led City officials to turn to the FBI, who asked that they remain silent about the investigation while their forensic auditor searched for the bottom of the rabbit’s hole.

What may have shocked the small city more than anything else is that the ruse was carried out by one of their own. Crundwell was raised just outside of the town, her parents being known for their quiet, hardworking, humble country roots.

But the shock of the $53 million revelation wasn’t lost on the City, its residents, or its departments. Like most every community in the country, the economic downturn hit Dixon hard. At one point, Crundwell cited a lack of money as reason for denying the police chief’s request for new squad cars and radar guns. Meanwhile, Crundwell travelled from horse show to horse show in her $2 million motor home.

The double life led by Crundwell wasn’t hidden, and each was used to justify the other. City residents assumed she afforded her upscale lifestyle because of her successful horse business. And those around her in the horse industry assumed she had some other source of income, perhaps family money. When she had to travel for her horses, Crundwell would take vacation. One year, when her travels took her away for 12 weeks instead of the 2 weeks vacation she was entitled to, she simply docked herself 10 weeks pay.

Crundwell maintained the appearance of complete transparency. So when the FBI led her away in handcuffs, the City was understandably shocked.

Crundwell has since had her assets frozen and auctioned, netting roughly $5 million.

Chicago Magazine’s in-depth report of the crimes, the investigation, and the future of Dixon is well worth the read.

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