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Ex-comptroller pleads guilty to embezzling $53 million

By Melissa Jenco, Chicago Tribune –

CHICAGO — A former treasurer of Dixon, Ill., pleaded guilty Wednesday to fraud in federal court in Rockford for stealing $53 million from the coffers of the small northwestern Illinois city over two decades.

Rita Crundwell will remain free on her own recognizance until her sentencing on Feb. 14.

When asked her plea to the one count of wire fraud, Crundwell quietly responded, “Guilty.”

Crundwell admitted to stealing the $53 million since 1990 and using the money to finance her championship quarter-horse business and a lavish lifestyle.

As part of her guilty plea, she also admitted she engaged in illegal money laundering.

Under federal sentencing guidelines, prosecutors believe Crundwell faces up to 191/2 years in prison, while Crundwell’s lawyers contend she faces no more than 151/2 years.

Federal prosecutors had sought to have Crundwell taken into custody.

In arguing to keep her free pending sentencing, her attorney, Paul Gaziano said, “She’s worked hard with the government.”

But the 25-page plea agreement gave no indication that Crundwell was officially cooperating with federal authorities.

Crundwell still faces 60 fraud counts in Lee County criminal court. Gaziano said he did not know how those charges would be handled in light of Crundwell’s guilty plea on the lone federal count.

Since her arrest in April, Crundwell has agreed to the sale of her assets so that some of the lost money can be repaid to Dixon, best known as the boyhood home of President Ronald Reagan.

So far, about $7.4 million has been raised by auctioning off about 400 quarter horses, a luxury motor home  and other equipment. Additional auctions are planned.

After court, Gaziano said that, with her guilty plea, Crundwell is “saving the government the burden and the expense of a lengthy trial.”

“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,” Gaziano added as he wrapped his arm around Crundwell outside the courthouse. “I think the people of the city of Dixon ought to know that.”

Gaziano wouldn’t take questions from a throng of reporters, and Crundwell had nothing to say before entering a black truck and being driven off.

At a news conference after the guilty plea, acting U.S. Attorney Gary Shapiro, a veteran prosecutor in Chicago, called Crundwell’s embezzlement “one of the most significant  abuses of public trust I’ve ever seen in Illinois.” He also referred to Crundwell’s “incredible avarice.”

“If nothing else, what we have in this case is an object lesson in how not to manage public funds,” he said. “This is a crime that never should have been allowed to occur.”

Shapiro said authorities intend to “find everything Rita Crundwell owns and liquidate it at the best possible price and return as much of the money as we can to the folks in Dixon.”

Shapiro said he doesn’t know what will happen with the Lee County charges Crundwell also faces.

Crundwell served as comptroller of Dixon since 1983, handling all of its finances. To conceal the scheme, Crundwell told other city officials that budgetary shortfalls were due to late payments of tax revenue from the state.

Dixon’s mayor reported Crundwell to law enforcement authorities in the fall of 2011 after another city employee filled in for Crundwell during an extended unpaid vacation and discovered a secret account she had been using to funnel the money.

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