By Melissa Jenco of the Chicago Tribune
“Where would we be if we had all the money we were supposed to?”
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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- Alleged $30M Theft By Comptroller Stuns Ill. City (wnyc.org)
- Horse-Breeding Town Treasurer Held in $30M Scam (newser.com)
- Official accused of $30M theft from tiny Illinois city (foxnews.com)
- Staggering $30M theft from tiny Ill. city (mercurynews.com)
- How an Illinois Comptroller Stole $30M (horsealicious.com)
- City’s CFO accused of looting $30 million (wnd.com)
- Dixon Comptroller Charged With Stealing (myfoxchicago.com)