When Rita Crundwell, former comptroller of the City of Dixon, was charged with embezzling over $53 million from the treasury in the small town in north west Illinois, the city was shocked. Now, it has decided to take action against city auditors for not noticing that millions were missing from its coffers.
The embezzlement, which went on for over two decades, has resulted in a lawsuit against Janis Card Associates, a Sterling based accounting firm and Samuel Card, its owner. The charges filed against them pertain to negligent misrepresentation and professional negligence since 2006. The suit mentioned that the auditors did not identify or report irregularities in the city’s controls, accounting and financial statements.
In April this year, Crundwell was arrested for misappropriating funds amounting to $30 million since 2006. She had been the comptroller and treasurer of the city from 1983 till 2012. Following this, in May, she was indicted formally by the authorities. They alleged that her thefts dated back to twenty-two years, and exceeded $53 million. After she was arrested in April, Crundwell was fired. When she went to trial on a charge for wire fraud, she pleaded not guilty.
According to prosecutors, Crundwell moved money from a few accounts to the Capital Development Fund account of the city. From there, the money was transferred to another account which carried the name of the city and RSCDA care-of Rita Crundwell. The fraud was detected by a city clerk last fall when filing in for the former comptroller. The clerk saw that the account had Crundwell’s name on it and alerted the mayor who informed that he was not aware of the account.
Prosecutors stated that the millions of dollars was used to fund a horse breeding company and to pay for her extravagant lifestyle. The company had about 300 horses who are now in the care of the US Marshals Service. The government released a statement that it will soon sell the horses and some of the other properties seized from Crundwell to return a portion of the funds the city lost.