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The mayor would have been even more aghast had he known what the world soon would: the amount the feds allege that Crundwell stole. Since 2006, according to an indictment filed in May in U.S. District Court, Crundwell filched some $30 million, or an average of $5 million a year—more than half of Dixon’s entire operating budget over that period. From 1990 to 2006, she stole another $23 million, the feds say, bringing the grand total to an unthinkable $53 million.
If the allegations against Crundwell prove true, she not only is the biggest municipal embezzler in U.S. history but ranks fifth among embezzlers of any kind, says Christopher Marquet, CEO of Marquet International, a Boston-based security consulting firm that specializes in employee misconduct. And though the amount that Crundwell is alleged to have stolen does not reach Madoffian proportions, it’s still “an outrageously, grotesquely huge amount,” Marquet says. “That she was able to do that and no one smelled it—it almost seems not possible.”
Crundwell awaits trial on a single count of wire fraud, for which she could face up to 20 years in federal prison and a $250,000 fine. In late September, state prosecutors added another 60 counts of felony theft, each of which carries a sentence of 6 to 30 years behind bars. If she is found guilty of all counts and the judge does not allow her to serve her sentences concurrently, she could spend the rest of her life in prison.
Meanwhile, Crundwell is free on a personal recognizance bond of just $4,500. The bond is so low because a judge deemed that Crundwell does not pose a flight risk—she has been lying low at her boyfriend’s place in Beloit, Wisconsin—and, sources say, because she has been cooperating with the feds. She has not fought the seizure and sale of almost all her assets by the U.S. Marshals Service, including more than 400 horses. Some of their names are almost comical in their irony: I’m Money Too, I Found a Penny, Good I Will Be. “These horses represent some of the best raised and bred in the quarter horse industry,” Darryl McPherson, U.S. marshal for the Northern District of Illinois.
Even though Crundwell pleaded not guilty in May, she acknowledged in the initial FBI interview in Burke’s office that she used “proceeds that she wrongfully obtained” to buy and maintain horses, among other things, according to court documents. Her lawyers, Paul Gaziano and Kristin Carpenter, who declined to comment for this story, are public defenders. Observers expect her to change her plea to guilty in the coming months.
Despite the ongoing liquidation of Crundwell’s property, the City of Dixon stands to get only a fraction of its missing $53 million back. That’s galling enough to the citizens. Further fueling their outrage is that Crundwell pulled off this alleged crime during a period when the city was gasping financially. When the chief of police begged her for the money to buy a few more radar guns, a couple of new squad cars, some new uniforms, only to be told that, sorry, there just wasn’t enough money. When the budget of the city’s beloved Municipal Band had to be cut in half, forcing the townspeople to raise money to make up the difference. When officials were compelled to slash the police, cemetery, and street departments and leave vacant jobs unfilled. “The city is in a fiscal crisis,” said the finance commissioner, David Blackburn, in a City Council meeting in October 2011.
If what the feds say about Crundwell is true and she was able to face the townsfolk with a bright smile every day, “well,” Burke says, “it is sickening. It shows she didn’t give a shit about our town.”
What Crundwell is alleged to have done isn’t the only cause for outrage in Dixon. After the tornado of her arrest passed, many more funnel clouds, equally dark, have dropped: How on earth could this have happened? How could no one have noticed? How was it possible for a small town not to miss that much money?
Two hours west of Chicago, perched on the banks of the Rock River, amid the cornfields and pastures that form large green checkerboards across the state’s northwestern farm belt, Dixon could be a back lot for a Capra film on all that is best about small-town America. Limestone courthouse, old-fashioned downtown, flag-flapping front porches—they’re all here. So are two bronze statues commemorating the years that Ronald Reagan spent in town. One shows Dutch astride a horse; the other gleams near the former president’s boyhood home, at 816 South Hennepin Avenue, Dixon’s primary tourist attraction.
Something else—ominous in retrospect—summons a small-town feel: the unusual system of governance. Since 1911, Dixon has been run by the commission form of government, an old model used by only about 50 of the 1,300 municipalities in Illinois. Power is divided among five people: a mayor and four part-time commissioners who oversee their own fiefdoms (public property, public health and safety, streets and public improvements, and finance).
The positions pay a pittance—the mayor makes $9,600 a year; the commissioners, $2,700 each, according to the annual budget—which means that most officeholders juggle their duties with full-time jobs and spend limited time at City Hall. The owner of a carpet and flooring store served as finance commissioner for a number of years. He was succeeded by a business teacher and athletic coach down at the high school, Roy Bridgeman, who served for more than two decades. As for Mayor Burke: he runs his own real-estate firm.
The problem is that “the commissioners are just citizens,” says Jim Dixon, a retired attorney who served as mayor from 1983 to 1991 and is a descendant of the town’s founder. “Some of them may not always have been qualified for the areas they were elected to oversee.” Dixon says he pushed, unsuccessfully, to change to the far more common city manager model of government.
Still, the commissioner system made for a neighborly and easygoing approach and seemed to accomplish the goals that gave rise to its adoption in the first place: placing a check on the power of the mayor’s office and curbing the possibility of corruption. It didn’t hurt that it also saved the city money on the salaries that a professional city manager and staff would command.
Until that day this past April—when word spread that the FBI had taken over City Hall and that Rita Crundwell had been frogmarched down the back stairs in handcuffs—the idea that such confidence could be either deeply misplaced or dangerously naive never seemed to occur to anyone.
And even if someone did have ill intent—a silly notion, given that most of Dixon’s officials had known one another for decades—it seemed highly unlikely that they could get away with anything. Not with Rita Crundwell watching the purse strings. She knew the books too well, was too smart and scrupulous. As finance commissioner Bridgeman (who did not respond to a request for an interview) told the City Council upon his retirement in April 2011: “Rita Crundwell is a big asset to the city. She looks after every tax dollar as if it were her own.”
2 months ago