Ex-Dixon official pleads not guilty to $53M theft

May 7, 2012 (ROCKFORD, Ill.) -- Former Dixon comptroller Rita Crundwell pleaded not guilty Monday morning to wire fraud in a Rockford courtroom. Crundwell is accused of stealing $53 million from the tiny Illinois town.

Crundwell, 59, had no comment as she left the courthouse. Neither did her public defender.

"We have no comment right now. She has no comment," Paul Gaziano, Crundwell's attorney, said as he left with the former comptroller. Prosecutors allege Crundwell used the money to finance her horse breeding operation and a "lavish" lifestyle. They allege she had been transferring Dixon's money to a secret account for more than two decades.

She is accused of siphoning off cash from the town, whose finances she controlled as comptroller, since 1990 for her personal use. She used the money for luxury homes, cars and jewelry, prosecutors said. She's also accused of using the town's money to bankroll one of the nation's leading horse breeding operations, which produced 52 world champion American quarter horses.

Prosecutors said Crundwell was caught when a coworker discovered the secret account while filling in for the defendant, who was on an extended vacation. She was arrested on April 17 and remains free on her own recognizance bond.

City officials said they are launching their own investigation.

"We're looking at having a forensic audit done. We're looking at potential litigation . . . and also hiring another audit firm," Dixon Mayor Jim Burke said.

Dixon is the boyhood town of U.S. President Ronald Reagan, and home to 16,000 people.

"They feel like they've been robbed. How could it happen?" Carol Fredrick, Dixon resident, said.

Authorities raided Crundwell's home, Dixon office, horse ranches, and a horse ranch owned by her boyfriend.

Dixon residents overflowed the City Council chamber Monday night during the public's first opportunity to question elected officials about Crundwell. They came with questions, but received few answers.

"To lose 20, 30 or 40 percent of revenue a year from the city and not know it, it's just unthinkable," said Gary Burger, Dixon resident.

"I would not find it acceptable for any kind of plea agreement to be entered into," said Randy Lilly, Dixon resident. "That's got to be our number on priority because the money is gone."

Dixon's mayor and city council members pledged more transparency, more audits and an internal investigation. But they told an overflow crowd the pending investigation into Crundwell prevents them from saying much.

"My biggest question is who's actually responsible?" said Bob Gibler, Dixon resident. "We can't just blame her. There had to be oversight."

"I don't have a good answer for anyone," said Mayor Burke. "We missed this. Five different city councils, three financial consultants, three different mayors, 21 annual audits, everyone missed it."

Burke was the one who tipped the feds many months ago after a worker filling in for Crundwell brought him a suspicious bank statement. Crundwell remains free, but loathed in the tight knit community.

"I fear for her in Dixon," Burke said. "I wouldn't want to be walking the streets of Dixon if I were her."

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