Rita Crundwell Has Horse Money

On this episode of Misfortune: A Financial Crimes Podcast, Adam and Danger talk about the insane case of Rita Crundwell. Our guest is Kelly Richmond Pope, Ph.D., a forensic accountant, associate professor at the School of Accountancy and Management Information Systems at DePaul University, and the producer and director of All the Queen’s Horses.

For nearly 30 years, Rita Crundwell was the trusted comptroller of Dixon, a tiny rural city with a population of just over 15,000. Located about 100 miles southwest of Chicago, its primary tourist attraction is Ronald Reagan’s childhood home. From 1990 to 2012, Rita Crundwell is believed to have stolen $53.7 million from the city, enough to make her the biggest embezzler in municipal government history.

At the time, Dixon operated under the commission form of government. It’s government consisted of a mayor and four commissioners, with each of those commissioners responsible for a specific area of operation, including finance.

According to a Chicago Magazine article, these positions paid next to nothing – the mayor made $9,600/year and the commissioners $2,700 each. Most of these officials held full-time positions elsewhere, and their city duties were secondary to their day jobs. The finance commissioner was technically the comptroller’s boss, but due to the low-paying, part-time nature of the commissioner position, it’s no surprise that they generally trusted the full-time comptrollers to do their jobs with little oversight. One finance commissioner, Roy Bridgewell, after retiring from the City Council even said, “Rita Crundwell is a big asset to the city. She looks after every tax dollar as if it were her own.”

Rita was one of six children. She grew up on a modest farm on the outskirts of Dixon. Her parents were known locally as hard workers, but Rita’s mom, Caroline, did indulge in one hobby – showing quarter horses. In high school, Rita started working part time for Dixon’s finance department. After graduating from high school, rather than attending college, she decided to work at City Hall full-time.

She took over the comptroller position after the previous appointee retired in 1983 and in just a few years had total control over the city’s money. In December 1990, she opened a secret new account in the City of Dixon’s name and listed herself as the only signatory. Over the next 20+ years, she created 179 fake invoices that appeared as though they were from the Illinois Department of Transportation and paid them from a legitimate city account with checks made out to “Treasurer.” (Incredibly clever of her, as checks to the state of Illinois would have been made out to “Treasurer, State of Illinois.”) She would then deposit these checks into the secret account.

During this time, if city auditors had looked closely at these invoices, they would have noticed the letterhead had no official logo, no contact name for questions, and that the word “section” was misspelled as “secton”. A quick phone call to the state to verify one of the invoices would have put an end to the theft.

One of the city’s auditors, accounting firm CliftonLarsonAllen LLP, also did Rita’s personal tax returns. Her 2007 return showed gross receipts for $700,000, despite her $80,000 annual salary, and the firm reportedly didn’t ask for any supported documentation.

Using the city’s funds, she took her favorite pastime, showing horses, to another level. At the time of her arrest, she owned approximately 400 horses, a herd worth millions of dollars, and had won over 700 championship prizes and ribbons.

Fellow competitors knew of her by her first name and at high-profile shows, she would stand out with her extravagance. A Chicago Magazine article described how she would show up in a $2 million motor home which came complete with a king size bed, satellite televisions, even a washer and dryer. This coach was accompanied by 10 trailers, with one particular trailer costing nearly $260,000. Her personal exhibit space at horse shows would feature a replica log cabin, and she would have a bartender serving drinks from a fully stocked bar.

Meanwhile, the city was experiencing a financial crisis, which Rita blamed on a general downturn in the economy as well as reduced remittances from the State of Illinois. City department budgets were slashed, employees went for years without raises, streets went unpaved, and even minor requests such as radio upgrades for the police department were denied.

Crundwell was smart enough to keep a relatively modest profile within city limits, and her neighbors simply assumed she was doing very well with horse sales and championship award money.

In October 2011, Rita took an extended vacation. During her absence, Kathe Swanson, Dixon’s city clerk requested bank statements for all of the city’s accounts. The banks complied, sending statements for all the legitimate accounts – and the secret account.

The mayor, Jim Burke, took the statement to Rockford’s FBI office and they asked him to keep quiet while they investigated. In the six months that followed, Rita stole an additional $3.2 million from the city. The amount she stole was more than the city spent during that time on police, fire, and maintaining infrastructure combined.

Rita was arrested on April 17, 2012, after leaving the city of Dixon over $21 million in debt.

Following her arrest, she agreed to the liquidation of her assets, which included jewelry, clothing, property in Illinois and Florida, more than four dozen vehicles, and of course champion mares and stallions. A weekend auction held at her ranch later that year attracted horse enthusiasts from around the world.

Total proceeds from those 2 days was nearly $5 million. One prize horse sold for $775,000 although it had to be euthanized the following year after not fully recovering from kidney stone surgery.

On November 14, 2012, in exchange for a guilty plea, the prosecutor limited the charge to a single count of wire fraud. On February 14, 2013, at the age of 60, Rita was sentenced to 19 1/2 years in prison.

The city of Dixon sued Fifth Third Bank for not properly monitoring the secret account under the city’s name, as well as the two parties responsible for auditing the city’s finances. Total settlements for these three suits was nearly $40 million.

The city of Dixon has since eliminated the position of comptroller and shifted its government from the commission form to the council-manager form, which means a city manager now has executive authority over the municipality’s day-to-day operations. Each invoice now requires at least 3 signatures, with the city manager personally signing off any invoice over $2,500.

Photo Credit: American Quarter Horse Association


  1. http://www.chicagomag.com/Chicago-Magazine/December-2012/Rita-Crundwell-and-the-Dixon-Embezzlement/
  2. https://www.forbes.com/sites/walterpavlo/2013/02/14/fmr-dixon-il-comptroller-rita-crundwell-sentenced-to-19-12-years-in-prison/#15e270a6dddb
  3. https://www.justice.gov/usao-ndil/pr/former-dixon-comptroller-rita-crundwell-sentenced-nearly-20-years-federal-prison-537
  4. https://localtvwqad.files.wordpress.com/2013/11/appeals-court-ruling-in-rita-crundwell-case.pdf
  5. http://www.saukvalley.com/2014/09/10/no-dixon-council-members-support-change-in-government-form/aok2pwa/
  6. http://www.chicagobusiness.com/article/20130202/ISSUE01/302029978/how-dixons-auditors-missed-the-biggest-embezzler-of-all-time
  7. http://northernpublicradio.org/post/avoid-another-crundwell-dixon-changes-government
  8. http://www.latimes.com/nation/la-na-horse-swindler-crundwell-20151030-story.html
  9. http://www.saukvalley.com/2013/11/12/prized-crundwell-horse-euthanized/aqofbq9/
  10. http://www.saukvalley.com/2017/04/14/crundwell-recovery-5-years-later/a7nasm0/
  11. http://articles.chicagotribune.com/2013-09-27/news/chi-attorneys-how-dixon-auditors-missed-54-million-fraud-20130926_1_treasurer-rita-crundwell-auditors-cliftonlarsonallen
  12. http://www.saukvalley.com/2013/01/10/fake-invoices-missed-signals-from-crundwell/au1xcub/