Rita Crundwell and the Dixon Embezzlement

THE $53 MILLION BAMBOOZLE: How the trusted comptroller of a small Illinois town became the biggest municipal embezzler in U.S. history, according to the feds—and no one noticed

Rita Crundwell leaves a Rockford, Illinois, courthouse after a hearing on her embezzlement case in August 2012.   Photo: Ray Whitehouse

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UPDATE (11.14.12): Rita Crundwell pleaded guilty to fraud on November 14 in federal court in Rockford.


It was time. The three men, in standard-issue FBI suits and ties, arrived at Dixon City Hall just after nine on the morning of Tuesday, April 17. They chatted breezily with Jim Burke, the mild-mannered, silver-haired mayor, who smiled and nodded from behind a cluttered desk in his office on the second floor. But for the badges tucked into the men’s wallets and the guns holstered on their belts, the gathering might have looked like a few insurance salesmen debating weekend tee times.

As the small talk petered out, however, a chill settled over the room. Burke looked up at the men. “Are we ready?” he asked.

The lead agent, Patrick Garry, nodded. “Yes. Let’s bring her in.”

Burke reached for the phone and punched in the number for the comptroller. “Rita, would you mind stepping into my office for a minute?”

“Sure,” Rita Crundwell answered brightly.

For five long months—ever since Dixon’s city clerk, Kathe Swanson, had stumbled upon a curious bank statement from an even more curious bank account—Burke had been helping the feds unravel an embezzlement scheme so vast and so brazen it seemed almost inconceivable. Tens of millions of dollars had been siphoned from the tiny rural city’s operating budget. The money was being dumped into a mysterious account and allegedly spent on everything but city business: jewelry, fancy clothes, a custom motor coach, boats, property in Florida, luxury cars, hundreds of the finest horses this side of Amarillo. And that was only what the feds had found in their cursory first look at the city’s cooked books.

Most stunning of all was the identity of the person suspected of masterminding the scheme: Rita Crundwell, a woman whose parents were the kind of humble, hardworking community pillars upon which Dixon’s reputation was built, a woman who had been the town’s comptroller for more than three decades, as trusted and efficient as a church tithe collector.

It was Burke who had taken the dubious bank statement to the FBI office in Rockford back in October 2011. Agents instructed him to hold his tongue while they investigated. As the months passed, he woke often in the night. Was this really happening?

The mayor’s thoughts turned to Crundwell’s hobby. Everyone in town knew that Crundwell, 59, who is divorced and has no children, owned and showed horses. The local paper reported on various championships she won, honors that bestowed a measure of pride on the city.

But very few in Dixon had the faintest idea of the operation Crundwell was running or of the magnitude of the double life she was leading. By day, she was a modest municipal worker with a high-school education; by night, she was a diamond-bedazzled high roller, the doyenne of a world that was a million miles in glamour and several million dollars in wealth from the cornfields and cattle farms of Illinois.

Week after week, Burke would pass Crundwell in the upstairs offices—a warren of cubicles with pile carpeting and cheap wood paneling—and pretend that nothing was wrong, trading “good mornings” with the woman he’d been told was robbing the city blind and smiling as she did. Week after week, Swanson, the city clerk who had flagged the telltale bank statement, swallowed her disgust as she watched the coworker she had once considered a friend breezing around the building.

Now the day of reckoning was at hand.

“Hi,” Crundwell chirped, sticking her head through the door.

“Morning,” Burke said. “Would you mind coming in?”

Garry wasted no time. “I’m with the FBI,” he said, displaying his badge. “We’d like to ask you some questions.”

From his desk, Burke studied Crundwell. If she has an ounce of shame, he thought, it will show on her face. When he saw her expression, the unwavering calm smile, he was stunned. “I was looking right at her,” Burke recalls. “And the look on her face never changed. Absolutely never changed.”


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2 years ago
Posted by ButterBeans

Exactly how is it that the IRS never once stepped in to say something was fishy about this situation. They audit the average joe all of the time over nothing and this woman who was simply a small town employee is living the life of a multi-millionaire, traveling the country showing horses, taking extended time from work and it never raised a red flag?

2 years ago
Posted by Pugs

A couple of points. In the state of Illinois, this type of "fleecing" is part of the accepted practice. You only have to look at the State Government, Cook County, the City of Chicago, the state pension gaming, etc.........to see that this type of behavior is the "norm" in governmental agencies. The attitude within the governmental agencies from a "personal" perspective is "I have mine, you go find a way to get yours"

2 years ago
Posted by armchair

Hope the those that questioned the numbers and got government involved to prosecute her rather than play with her get an article as well.

2 years ago
Posted by bitobliss

Y'all should also take a look into the disappearance of her ex-husband. He disappeared about the time she started embezzling from Dixon.

2 years ago
Posted by mimilona

I grew up in Dixon and was in that high school program with her in 1971. I never really knew her but I am disgusted that she could do this to her friends & neighbors. People who think that the town of Dixon was blind & naive don't understand the small town mentality. You trust your fellow neighbors until they give you cause to mistrust them. The majority of your fellow citizens are honest. Unfortunately Rita was not one of those. I am so sorry for my old friends there who are going through this. But I am sure they will bounce back because they are strong & resilient. I am proud to be from Dixon, Illinois

2 years ago
Posted by Uhlan

A state where this type of swinishness and corruption is not only tolerated, but laughed at and encouraged, is one where I don't buy real estate. Illinois deserves to have its bond rating lowered beyond what it has already been (to an A), and my sympathies to the vast majority of my co-citizens who are downstream from the sewage output of Crundwell and her ilk. Maybe part of her karma is her off-putting and remarkable physical ugliness. She deserves much worse than to look bad.

2 years ago
Posted by Dixonresident

What happened here in Dixon goes beyond theft. It demonstrates moral bankruptancy in those who wield power, as well as their blatant disregard for others. It's not just city hall, folks.
The worst part is that people are so naive to think that Rita is a one-woman wrecking ball. Can one honestly say that this happened over the years without anyone catching on? Sure, crucify Rita through due process and make her a scapegoat, but realize this: the city allowed itself to be robbed blind because of its administrative ineptitude and shoddy bookkeeping.

2 years ago
Posted by not of the crowd

So this happens in Illinois, to a small town.. Well this state and many small towns within Illinois have been stealing and attempting to seize assets from individuals for a long time. This goes on and everyone looks the other way.
If we all step back and think about it honestly and fairly we can see it. However no one says anything unless it affects them or impacts their town directly.
To take this even further, people justify this theft from individuals with the most pathetic excuses.
Next time you complain about Dixon and what happened there remember that jealousy and petty jealousy harbored by numerous individuals has fueled thefts that have been so justified as for the benefit of a town or city for a long time. Remember this when someone's farm or land becomes a target of a town, the state or the city you live in. $53 million is a drop in the bucket and you guys looked the other way, didn't want to rock the boat. Shame on you.

2 years ago
Posted by Nobmam

I am shocked that there is corruption in Illinois, shocked!

Terms limits is the answer. I will bet my hard earned honest money that Madigan has this going on as well.

2 years ago
Posted by MARK CZ

Rita Crundwell is an interesting case study regarding checks and balances and lack there of. Sure, she stole all of this money. What's interesting - small town mentality or not - is no one felt the need to provide a thorough review of Rita's work. These are public funds. If I'm Rita C., I would welcome a complete and thorough review of all of my accounting activities just for liability protection. The fact this did not occur and that Rita's work activity was not seriously reviewed shows a general lackadaisical attitude of the mayor and or the city council.

2 years ago
Posted by MizzO52732

She took Millions from a city that remained in working order.

I say let her run for governor of IL.

2 years ago
Posted by Justsayin2

I am also from a small town here in Illinois about 80 miles east of Dixion, it is known in our town that our Mayor has a construction company, and guess who gets all the contracts in our town to build a pavilion in a village park or put in sidewalks that the village needs, street repairs being paid with stimuis money or any other village project. The Mayors construction company always seems to win the bids on these projects, (maybe it's because he opens them) he also uses village workers and equipment on these projects. Unethical practices are always a part of government, sometimes it's just a bit larger story when the FEDS get involved.

2 years ago
Posted by Trustme

Now do any light bulbs finally go off, on how it is possible that the state of Illinois owes $130 billion ?

How many state workers, city workers, commissioners, alderman, mayors, and all the many people they come into contact with, are pilfering from "the system" just as Rita has been doing ? If you have hundreds and thousands of people bid rigging, shuffling funds, way over pricing contracts for work, and just generally skimming off the system, it easily adds up to billions. Here is this small town, losing MORE THAN HALF its entire annual budget, and not one soul caught on.

For the people who suggest that type of thing cannot possibly happen in their own city, or town, or muni. - well that may be true of that one type of activity with that one situation in Dixon. But there are hundreds of different ways the system can be "milked." It just doesn't happen in government - its in business too.
If everyone started asking more common sense questions, like where does the money go, who gets it, and why so much, or why aren't we making budget, then hidden pilfering can be brought to the surface. The state needs to make whistleblowing, and reporting, a well rewarded opportunity, and protecting the people who uncover the shady practices. Thats just for starters. Taxpayers here just send in their money, and maybe vote once in 4 years, and that's it. No one wants to get involved, or be "nosy" into people's business. We'd all rather sit comfortably sit at home, in front of our computers and laptops and Ipads, and read about these stories, and pretend it's not happening in our little town or city or business or church or whatever organization that has a budget.

2 years ago
Posted by syedr

I am wondering where are those millions we are raising from Illinois Lottery? Our licence plate fee has doubled in last five years, tolls has increased 100%, 100% increase in power bill, these corrupt politicians are embezzling money from people and apparently no one can do anything.

1 year ago
Posted by PoppyMo

First of all when some one is employed by the government,wether it is at state, city, or Federal level it is very much your business to inquire and be informed about what they are doing with your money. The money they make and the money they handle,afterall, does come from you. Unfortunately we are too trusting or just plain complacent and we would rather not become embroiled in our government processes... well guess what... that attitude is what got us in the mess we are in now. From being indebt to no one and one of the greatest countries in the world to being one of the most corrupt. I am not to well liked in my husbands family because I questioned where a house painter nephew got the money to buy his bimbo girlfriend a bigger set of boobs and take her on lavish trips and buy expensive vinter reserve wine. When his mother was bragging how good he was with his money, I asked her where it was all coming from. Guess what... he is now in Huntsville serving a thirty year sentence.

1 year ago
Posted by llmequon

I agree with Stout--she's a sociopath. They can fool people for a long time--trust me. And unless you're looking for it, embezzlement can be hard to detect. Everyone out there, whether a city government, small business or large business--or even just some individual with a financial adviser--needs to take note. Separate duties and LOOK for the red flags!

1 year ago
Posted by Santos

Don't ever think the "more modern form of city government" with a city manager is perfect either.
these guys can "waste" a city into bankrupcy..

9 months ago
Posted by Listen2me

I've 2 words for Dixon, and small towns everywhere: OUTSIDE AUDITORS

Like large corporations, the books of any city should be audited every year by outside auditors to assure proper handling of all accounts to catch people like Crundwell early in the game and to improve internal procedures.

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