Employee Accused Of Stealing $30 Million From Dixon, IL - News and Weather For The Quad Cities -

Employee Accused Of Stealing $30 Million From Dixon, IL

Members of the media and citizens pack a news conference on embezzlement in Dixon, IL Members of the media and citizens pack a news conference on embezzlement in Dixon, IL

The mayor of Dixon, Illinois says it made him sick to his stomach. That's how Mayor James Burke said he reacted when he learned of an alleged wide-scale embezzlement at the hands of a city employee.

Burke read a statement during a news conference Wednesday morning, where members of the media and the Dixon community packed the room.

The case came to light Tuesday afternoon when the city's chief financial officer was arrested.

58-year-old Rita Crundwell faces federal charges accusing her of the misappropriation of more than $30 million since 2006. Crundwell is well-known in the Dixon area for breeding and showing world champion horses. The FBI says she financed that hobby with millions of dollars she embezzled from Dixon taxpayers.

On Tuesday, federal agents seized her bank accounts, seven trucks and trailers, a $2 million motor home and a Ford Thunderbird. According to the F.BI, they were all paid for with money Crundwell stole from city bank accounts.

She's been working for the city of Dixon since the early 1980s.

At the news conference, Mayor Burke wouldn't take any questions, but read the following statement:

I would like to thank the FBI for their comprehensive response to our request for a criminal investigation into this matter. This is a traumatic, upsetting event that the citizens and the city council are experiencing. Last October, I contacted the Rockford FBI Office and requested a meeting concerning a bank statement brought to my attention by the Dixon City Clerk, Kathe Swanson, that suggested a misappropriation of city funds. While meeting with Agent Pat Garry in his office and presenting the information to him, I literally became sick to my stomach and told him I hoped that my suspicions were all wrong.

When the charges were made against Rita Crundwell yesterday, and she was arrested, I could see those same sick feelings manifested in the faces of city employees. All of those responsible for affairs of the city can empathize with the thoughts and emotions that the citizens are experiencing.

We realize the main question is how can someone allegedly steal 30 million dollars and get away with it for so long? The city has an annual audit prepared by two independent certified public accounting firms. One firm compiles and presents the basic financial statements dealing with funds, assets, income and expenditures. That firm is Clifton, Larsen, Allen. The second firm, Samuel S. Card, Sterling, takes that information and reviews and issues an independent auditor's report. The results year after year disclosed no instances of non-compliance or other matters required to be reported under government auditing standards. Furthermore, the Illinois Governmental Account Audit Act requires the city to file its annual audit and other financial documents with the Illinois Comptroller's Office. The audit review showed no adverse findings or red flags about the City of Dixon Audit. Fifth, Third Bank, where many city accounts are held, plus the account that Ms. Crundwell transferred funds into, never reported anything suspicious.

Many have asked how the city did not realize 30 million dollars had been stolen from our community. It is no secret that communities across the country are struggling financially. The city of Dixon was no different. We are a tax-capped community, which means we cannot raise property taxes to meet expenses. Like Lee County, we have seen a sharp decline in revenues from the landfill. Cash flow problems were complicated because the state has been substantially behind on income tax payments. The city is self-insured, and we have experienced a significant increase in health care costs. The city has also invested in our infrastructure with many projects which have benefited our community. These facts combined led to a plausible reason for the financial problems our community is facing.

Through discussions and input from the city council, we will undertake the following steps to restore the credibility and confidence going forward:

Working with the FBI, every effort will be made to acquire assets and convert them to cash for the benefit of the city. The city will be retaining an independent investigator to look at any instances of wrongdoing outside the purview of the FBI. Having said that, we do not believe any other city employee committed a wrongdoing, but that is why we will have an independent investigation. We will be taking immediate steps to retain an interim comptroller. Rita Crundwell will be placed on administrative leave without pay until the legal issues are settled. The council will appoint an independent panel consisting of a CPA, banker, and attorney to research internal financial controls and make recommendations to assure this never happens again. The city will be interviewing and retaining a new certified public accounting firm to conduct the annual city audit.

Finally, I want to say although this whole situation is a setback for Dixon, this is a strong city that will recover. We have strong leadership, both professional and non-paid volunteers, in every facet of the community. This is a beautiful city bursting with vitality and citizens should be proud of its past and confident in its future.

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