Dixon Receives $40 Million Out Of Court Settlement - News and Weather For The Quad Cities -

Dixon Receives $40 Million Out Of Court Settlement

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UPDATE: The City of Dixon getting back a big chunk of public money stolen over the past two decades.

Dixon's Mayor says the city will see about 40-million of the 53-million Rita Crundwell embezzled, spending it on a lavish lifestyle and horse-breeding operation. She pleaded guilty and was sentenced to nearly 20 years in prison back in February. Now, the city is about to recoup much of what it lost.

Long known as Ronald Reagan's hometown and the Petunia Capital of Illinois, for too long Mayor Jim Burke says, all the talk in and about Dixon has been about Crundwell. He says it's "dominated things". But he says he's hoping that will change, now that the city's reached a settlement with two auditors and a bank in connection with Crundwell's thefts. Mayor Jim Burke says, "I think this is certainly gonna help, I really do. It's got to help I think."

He says it took work to make it happen, a year of legal wrangling and mediation. The final session was last Friday in Chicago. "We walk in, " Burke says, "and there's 35 people there. So I thought maybe something's gonna happen now with this deal. 'Cuz I mean there was insurance companies and all the defendants and attorneys all over the place." "I mean I never had an experience like this in my life."

Each group was set up in its own room. "And I think the first offer came in from them, was like 12-million dollars. And I knew then it was gonna be a really long day." And it was, ending more than 17 hours later with Dixon getting 40-million dollars.

"They're probably lucky to get anything back," Frank Mendoza tells us. "But 40 million's a pretty good chunk." Patricia Dibenedetto says, "They should get more. They should get what they're owed, that she took." The Mayor says Dixon got as close as possible to that 53 million. "I don't think there was any money left on the table. I think we got all we could get ."

Up until now, he says, "We were able to pay our bills and keep our head above water in spite of this embezzlement, but we did it by borrowing a lot of money." This 40-million will be added to 10-million coming from the sale of Crundwell's assets. And the Mayor says there is still more to sell, potentially even more money coming in. But right now, with a recovery of 50-million dollars, minus 10 for expenses, Burke says, "We're gonna be very solvent when this is completed here." And he says able to move past this, for the city's bottom line and for its residents. Carole Krueger says, "That would be nice to have everything settled, we don't have to hear about it anymore."

Although residents will get a chance to talk about where this money is going. Some tell us they want to move forward with work on the pool that had been put on hold, or fixing up streets. And the Mayor tells us there will be a public meeting to make that happen. He says his goal is transparency. The Finance Director will go in-depth for residents about how much money was actually borrowed and what this recovery means to the city. The public meeting will be sometime next week.

As soon as the Mayor schedules it, we will pass on the date to you. Meantime, he tells us everyone involved has agreed to this settlement, which is pending approval by a judge.

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The City of Dixon, Ill., announced they will receive $40 million after reaching an out of court settlement in regards to lawsuits filed in connection with the $53 million that Rita Crundwell embezzled from the city.

Litigants in the lawsuit included Clifton, Larson, Allen; Fifth Third Bank and Sam Card Accounting.

On Friday, September 20, 2013, after 17 hours of deliberation, parties involved agreed to the $40 million settlement and to keep the lawsuits from going to court.

Mayor Burke says a special public meeting will be scheduled for the week of October 1, 2013 to discuss the financial impact on the city.

The public is encouraged to attend to comment and ask questions.