Rita Crundwell

Rita A. Crundwell (née Humphrey; born January 10, 1953) is the former Comptroller and Treasurer of Dixon, Illinois, from 1983 to 2012, and the admitted operator of what is believed to be the largest municipal fraud in U.S. history.

In 1970, a year before graduating, the teenager began working at the Dixon City Hall as a work-study student.

She married engineering technician Jerry L. Crundwell in 1974, while working as a secretary for Dixon's mayor, but divorced Crundwell in 1986.

She began showing American Quarter Horses in 1978.

In 1983, Crundwell was appointed the treasurer and comptroller for Dixon, working in this capacity for almost three decades.

On December 8, 1990, Crundwell opened a secret bank account named the Reserve Sewer Capital Development Account (RSCDA), making it appear to be a city account.

She was the only signatory.

Crundwell would have money deposited into another account called the Capital Development Fund, create false state invoices, and then write checks from the fund payable to "Treasurer," which she would deposit into the RSCDA account.

According to federal investigators, this relatively uncomplicated scheme continued for 22 years.

On average, Crundwell stole nearly $2.5 million per year from the city, starting from a low of $181,000 in 1991, growing to the embezzlement of $5.8 million in 2008 – from a city with an annual budget of $8–9 million.

Crundwell used the money not only to finance her Quarter Horse operation, but also to support a lifestyle well beyond her $80,000 city salary, purchasing several cars, a second house and a $2.1 million 45-foot luxury motorhome.

Crundwell covered up her embezzlement by claiming that the city's frequent budget shortfalls were due to the state being late in paying its share of tax revenue.

She forced city departments to make drastic service cuts in order to keep the budget within reason.

As a result, employees went two years or more without raises and the police department could not afford new radios.

The most visible effect, however, was on street maintenance; the city was forced to lay off three of its nine street repair workers and cut the rate of maintenance.

In the decade prior to Crundwell's arrest, only 65 blocks of road were repaired or replaced.

For most of Crundwell's tenure, residents assumed either that she inherited her wealth and/or that her horse breeding business was profitable in its own right.

However, by the onset of the Great Recession, some grew suspicious that Crundwell was stealing money.

Crundwell acquired a sterling reputation; in 2011, one of the city commissioners praised her stewardship of city finances, saying that "she looks after every tax dollar as if it were her own."

In the fall of 2011, while Crundwell was on an extended vacation, city clerk and acting comptroller Kathe Swanson discovered the RSCDA account with 179 deposits and associated checking activity.

Swanson did not recognize the account as a legitimate city account, and alerted Dixon mayor James Burke.

In turn, Burke contacted the Federal Bureau of Investigation (FBI).

For the next six months, Burke and Swanson (whose payroll was controlled by Crundwell) remained silent while the FBI built their case.

She was fired in April 2012 after the discovery that she had embezzled $53.7 million from the city of Dixon for over 22 years to support her championship American Quarter Horse breeding operation, as well as a lavish lifestyle away from work.

Crundwell pleaded guilty to her crimes and was sentenced to 19 and a half years in prison.

Crundwell used the stolen money to turn her Quarter Horse breeding operation, RC Quarter Horses, into one of the best-known in the country; her horses won 52 world championships and she was named the leading owner by the American Quarter Horse Association for eight consecutive years prior to her arrest.

She spent less than 8 1⁄2 years (43% of her sentence) in prison before being released in mid-2021 to serve the remainder of her sentence in home confinement at her brother's 80 acre farm in Dixon.

Born Rita Humphrey, the daughter of Ray and Caroline Humphrey, Crundwell grew up on her family's farm near Dixon, and was a smart and popular student at Dixon High School.

But the city's outside auditors, Clifton Gunderson (now CliftonLarsonAllen after merging with LarsonAllen in 2012) and local accountant Samuel Card presumed that Crundwell was honest and signed off on her annual financial statements without concern.

For small U.S. cities similar to Dixon, lack of sufficient outside audits was a recurring problem, as third-party auditors could give at best limited attention.

For most of her tenure as comptroller, Crundwell had nearly complete control over the city's accounts, while few city employees had access to the city's financial statements.

Crundwell arrived for work on April 17, 2012, to find FBI agents waiting for her.

She was arrested later that day and was indicted by a federal grand jury for embezzling $30 million in city money over the previous six years.

Crundwell was charged with one count of wire fraud and released on $4,500 bail the next day.

On May 2, 2012, a superseding indictment charged Crundwell with embezzling $53 million over the prior 22 years.

On November 14, 2012, Crundwell pleaded guilty before Judge Philip Reinhard to a single count of wire fraud.

As part of the deal, she also admitted to money laundering by using the embezzled money to finance her horse operation.

Crundwell was required to forfeit more than $53.7 million in cash, assets and possessions, equivalent to the amount she stole, which is being used to make full restitution to the city.

She reportedly told FBI agents that some of the money was spent on her horses and their upkeep.

Prosecutors sought the forfeiture of her horse farm and 300 horses, in addition to her three homes and a luxury motorhome vehicle.