Update: Charges Against AQHA Top Breeder ‘Awakened Sleepy Little Town’

By Melissa Jenco of the Chicago Tribune

“Where would we be if we had all the money we were supposed to?”

( Phil Velasquez, Chicago Tribune / April 18, 2012 )Dixon city comptroller Rita Crundwell, left, leaves the Federal Building in Rockford Wednesday afternoon with her lawyers after being released.

The chief financial officer of the small northwestern Illinois town of Dixon was ordered released from custody yesterday afternoon, a day after her arrest on a charge she misappropriated about $30 million in city funds.

U.S. Magistrate Judge P. Michael Mahoney agreed to free Rita Crundwell on a handful of conditions, including that she cannot sell or dispose of her horses or real estate and cannot remove funds from two bank accounts.

The Dixon comptroller, who was put on unpaid leave, also must surrender her two guns and cannot travel outside the Northern District of Illinois and Western District of Wisconsin.

Crundwell, dressed in an orange jumpsuit, said little during the brief hearing with the exception of responding, “Yes sir,” when Mahoney asked if she agreed to waive her right to a preliminary hearing.

She is due back in court May 7. She was charged with one count of wire fraud.

After the hearing, Crundwell’s attorney, Paul Gaziano, declined comment, as did about eight family members and friends who attended the hearing in federal court in Rockford.

Assistant U.S. Atty. Joseph Pedersen said the investigation is ongoing and his office would “seek to recover any and all assets we can and return those to the city of Dixon.”

Dixon Mayor James Burke, during a brief press conference at City Hall this morning attended by at least 75 residents and city employees, announced Crundwell was on unpaid leave. The mayor took no questions from reporters.

Crundwell was arrested Tuesday on a single count of wire fraud. Authorities alleged she stole city funds over the last six years to finance an extravagant lifestyle that included spending huge sums on her horse farms in Dixon and Beloit, Wis. as well as jewelry and a luxury motor home.

Burke told the crowd that two independent firms audit the city and have found “no issues of non-compliance.” When the city filed its audits with the state, Burke said a review also came up with “no adverse findings” and the city’s main bank also did not notice anything suspicious.

As for the city not realizing $30 million had disappeared from its coffers over the past six years, he said a multitude of factors played into its financial issues including its tax cap, declining revenue, late payments from the state, rising health care costs and investments in infrastructure.

“These facts … are a  plausible reason for the financial problems our community is facing,” he said.
But longtime resident Doug Hoyle, 61, said the staggering losses “gives the impression city officials are grossly negligent and incompetent.”

“It awakened a sleepy little town,” he said.

Resident Ellie Shank, 65, said she can’t help but wonder “where would we be if we had all the money we were supposed to,” citing a closed city pool and the need for road improvements.

Burke said the city will retain its own independent investigator to look into the wrongdoing, but he does not believe any other city employees were involved in the thefts. The council also will appoint a panel to research additional financial controls for the city and will hire a new accounting firm to perform audits.

“This is a strong city that will recover,” the mayor said.

Crundwell is a champion AQHA horse breeder.

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26 comments on “Update: Charges Against AQHA Top Breeder ‘Awakened Sleepy Little Town’

  1. I just cannot believe the stupidity of the people in charge in Dixon. Regardless of audits, it would seem that someone close to the funds and close to the inner workings of the city would notice irregularities.

    Also, anytime an employee, whether they are city or private, spends an exhorbitant amount of money, and lives above their means, it should arouse suspicions.

    In a small town they should have known that she would not have been working at the job she had if she had that kind of money to throw around, she wouldn’t need to work.

    Outside auditors do not have access to the kind of personal information that people who live and work with her do. Unless they delve into the private lives of the city employees, they would not have any reason to be suspicious of her, but her fellow city employees should have smelled a rat.

    Everyone was asleep at the wheel wouldn’t you say?

  2. this same thing happened here, in the next town over from me, Oxford, Connecticut. This tax employee was also employed for 20+ yrs. The sad thing is they don’t even have to go back to their hire date to determine the extent of the theft. The punishment is just as severe for $250,000.00 as it is for $3 million! This person here, told fellow employees, she had a wealthy Aunt pass, that left her the extra $. She spent taxpayer’s money on $1800 boots, $10000.00 cruises amongst other things that us normal taxpayers can not afford. We pay the taxes that the laws tell us to do. therefore we can not afford these things. It really angers me these things are going on and there isn’t a better checks and balances to catch these scumbags. I hope the laws in Illinois are harsh and she pays for everything she has taken. Can’t even imagine why she needed a 2.1 million dollar RV, my parents enjoyed their $110,000 one! Greedy scumbag.

  3. 30 million dollars over 6 years and they are just now concerned? slow to react are they. its probably cause it never happened. they are looking for a fall guy. if she is in the horse business she probably doesnt need their money anyway. AQHA makes its own money. something is stinking in Dixon.

    • If she is making so much $ in the QH business, enought to purchase a 2 million+ dollar motorhome, WTF is she working at a $80,000 a year job? Vickiejom?????

  4. PEEEE-UUUUUuu!

    The mayor sounds like Pontius Pilate…”I didn’t have nothin’ to do with this!”

    Yeah, right and chickens have teeth, pigs fly.

  5. I raised AQHA for years b4 I switched to Paints. Glad I don’t have to have anything to do with AQHA anymore. They would never get another penney from me. This comment has nothing to do with Dixon’s Crundwell. It has to do with the AQHA who in my book is as bad as the BLM.

      • Denise, never said APHA wasn’t bad. For the last several decades, the AQHA and APHA have been going hand & hand. APHA isn’t getting any more of my money either, I’m retired and only have a handful of old mares who will be with me until they die.

    • AQHA issued an Action Alert under an unconscionable headline of “Don’t let our nation’s horses suffer any longer” where readers are asked to contact their elected officials to ensure that there will be no legislation passed which would “prevent the USDA from paying the salary of any employee to inspect horse processing facilities”. In other words, they want to buck the law and bring bloody horse slaughter back to the United States.

      • Steve, thanks for the info.

        Odd how AQHA is pushing slaughter when a significant member of AQHA stole money (allegedly) from taxpayers to fund a lavish lifestyle that included breeding QHs.

        Hmmmm, so AQHA and other breed associations, orgs want the US taxpayer to subsidize their reckless breeding and ownership failed economic model, that also peddles unsafe meat? So, exactly who are the welfare Queens now? These idiots are a hoot (if it didn’t include cruelty to equines and unsafe food for humans).

        Hypocrites!….on our dime, no less.

      • The AQHA’s statement is ludicrous, they are trying to make people that THEY think are uninformed, that they give a s*%t about whether the horses are slaughtered here or in Mexico or Canada. Those bozos think that they can appeal to us by saying that it is better to be dealt the death blow here in order to avoid the long trip to hell in Mexico or Canada.

        Well good old boys and girls of AQHA, that doesn’t fly, and you are a bunch of hypocrites. We DO want Congress to pass legislation that WILL prevent paying anyone in the USA for inspecting “horse processing facilities”.

        We DO NOT want horse slaughter started up again in this country. OF COURSE it would be a lot easier for the AQHA and their ilk to have their “culls” slaughtered here,

        It would save them money for transport, truckers, etc. They could eliminate a lot of middlemen and then their slaughter profits would be even greater!

        I have no patience with the games that are being played and the lies that are being published by the likes of the AQHA and others.

    • What is your angst with the AQHA? I’ve been a lifetime member for a lot of years and don’t have a problem with them.

      • Sam, good for you. The AQHA is one of the organizations pushing to bring back horse slaughter. I don’t have anything to do with any organization that wants horse slaughter. That’s what is my problem.

      • Well, either you are a very UNinformed AQHA member or you don’t have a problem with human consumption horse slaughter supported by one of the biggest breedum’ and dumpum’ groups in the US; then you would be lacking ethics and morals.

        You choose Sam; stupid or evil?

  6. “The horse world is populated by two kinds of people : those who love horses, and those who exploit horses and the people who love them!!!”
    Quote from the book Dark Horse by Tami Hoag
    And those who would exploit horses, are willing also to exploit their fellow man…JUST like animal cruelty leads to human cruelty!!!

  7. Well I guess since she’s AQHA she won’t feel too bad when they sell all her horses for dollars-per-pound for restitution money, will she. Hey – its AQHA! That’s what they do, just ask Dave Duquette!

    Poor horses. It’s always the animals who suffer the complete idiocy, greed and immorality of the owners.

    • Sarahkate, that’s the bad part. How much will her horses suffer and what will happen to them because of her greed and immorality.

      • From a legal standpoint, all her assets were likely seized even assets with questionable ownership including the operation’s accounts receivable – that is why AQHA is telling people that they may have paid for stud fees for her stallions and may even have had semen shipped from said stallions the foals may not be registerable because paperwork will be in disarray. Likely if semen wasn’t already shipped they are out of luck because the money for stud fees “in the pipeline” (so to speak, sorry for the pun) would be part of Crundwell’s seized assets. If there were transactions that were in the middle of of the process, such as sale or purchase of horses all activities and the money associated with the activities would be frozen; if there was a transaction completed as far as paperwork but no money had changed hands yet, whoever is owed the money is going to have to find a good lawyer and have a lot of patience to get it straightened out and it in all likelihood won’t ever be straightened out and it would be debatable whether (for example) a horse being sold by someone else to Crundwell but not yet paid for pre-arrest, that horse would also be seized and locked up and the selling owner would be at least temporarily out of luck for getting the horse back – and may never get their horse back without strong, determined and immediate legal action, which not a lot of people can afford esp. those in another state from Crundwell’s operations. Meantime, live animals seized as assets from Crundwell’s “care and control” will be under lock and key of the authorities and who knows whether they will be properly cared for or not (IMO, not properly cared for and certainly not cared for in a way that will maintain or increase their value and certainly not responsibly marketed with an eye toward responsible new owners willing to pay market price – rather, backyard sneaky sheriff auction or the MEAT MAN with that option taking high priority because it is fast).

        Yes indeed THESE HORSES WILL SUFFER.

        I do think we all ought to be very careful to not ourselves convict Crundwell before a trial! We do not know all the facts, we do not know for sure that what she is accused of doing is actually what she did! Even though there was an intensive investigation remember she was let out on very short bail and even though some jurisdictions have more lenient bail-setting guidelines than others, truly, if the feds really truly thought she was completely guilty of embezzling $30M over six years believe me – as a paralegal of some 38 years I’m here to tell you she wouldn’t have been let out on that small amount of bail. No way, no how. The sheer dollar amount of the suspected embezzlement would have deemed her a high flight risk.

        Every single one of us who has horses should be thinking every day about how their actions appear to the public. My family set up a trust long ago for our “horse habit” – I have had to explain countless times to non-horse people who wonder how I can “afford” to have two MINIS (good grief) on my “small salary”. Every time that there is arrogant behavior or exclusionary behavior or rude behavior or bad manners exhibited by a horse owner or trainer or rider, it adds to the really bad press that lately seems to be permeating the media in particular and society in general about equestrian pursuits.

        Just sayin.’

      • Sarahkate,
        A very good comment, and all good reasons why we should remember, if it quacks like a duck, it’s a duck or something to that effect.

        Which brings to mind the BIG question: if she is not guilty of taking all that money, then how did she finance all the goodies? If she made all that money from Quarter horses then we all should be raising them.

  8. Just a thought to interject..since there is a large percentage of QHs who carry the HYPP gene.-have any studys been done to certify that that condition would not be passed to humans who would consume horse meat..there are several other genetic conditions that exist as well…and grey horse/cancer tumors..I saw a video last night of this womans show horses..they are most definately the “Impressive breed” the carrier of the HYPP gene..who is going to feed 2 ranches full of horses while all her funds are tied up?.
    For the last 10 -12 years all horses containing the impressive gene in their family have to be tested and papers are stamped with the results..but prior to that there was no blood testing on hundreds of thousands.If they had hypp they eventually died suddenly..since most horses that go to slaughter are not sold with papers–how can that be tracked in the food chain??

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