Bookkeeper guilty in $53M scam

ROCKFORD — A longtime bookkeeper pleaded guilty Wednesday to embezzling more than $50 million from a small city in Illinois to fund a lavish lifestyle that included a nationally known horse-breeding operation.

Rita Crundwell, the former comptroller of Dixon, pleaded guilty to a charge of wire fraud in federal court in Rockford. She was allowed to remain free until her Feb. 14 sentencing hearing. Prosecutors say she siphoned money into a secret bank account while overseeing the city’s finances.

Crundwell did not make a statement during the hearing and answered the judge’s questions with “yes” and “no.” She left the courthouse without speaking to reporters, but her lawyer gave a brief statement that emphasized her cooperation with prosecutors.

“Rita Crundwell today admitted her guilt, saving the government the burden and expense of a lengthy trial,” attorney Paul Gaziano said. “Rita, since the day of her arrest, has worked with the government to accomplish the sale of her assets, including her beloved horses, all with the goal of hoping to recoup the losses for the city of Dixon.

“I think the people of the city of Dixon ought to know that.”

Crundwell’s guilty plea in the federal case enables the U.S. Marshals Service to start selling off millions of dollars of assets still in her name, including about $450,000 worth of diamonds and other jewels, ranch land and a house in Florida.

The marshals already auctioned dozens of Crundwell’s horses and other property, raising $7.4 million, but say they doubt they’ll recover the full amount Crundwell stole.

Gary Shapiro, acting U.S. attorney for northern Illinois, said Crundwell’s case is “one of the most significant abuses of public trust ever seen in Illinois.”

Dixon Mayor James Burke said independent auditors who reviewed the city’s books over two decades failed to catch on to Crundwell’s scheme. Lessons have been learned and changes have been made, he said.

Residents in Dixon are largely lower-middle class, working at factories and grain farms. They had come to trust Crundwell to manage the town’s finances with little oversight, and Mr. Burke said her plea was welcome.