Rita Crundwell
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Rita A. Crundwell (née Humphrey; born January 10, 1953) is an American woman who served as the
comptroller A comptroller (pronounced either the same as ''controller'' or as ) is a management-level position responsible for supervising the quality of accountancy, accounting and financial reporting of an organization. A financial comptroller is a senior- ...
and
treasurer A treasurer is a person responsible for the financial operations of a government, business, or other organization. Government The treasury of a country is the department responsible for the country's economy, finance and revenue. The treasure ...
of Dixon,
Illinois Illinois ( ) is a U.S. state, state in the Midwestern United States, Midwestern United States. It borders on Lake Michigan to its northeast, the Mississippi River to its west, and the Wabash River, Wabash and Ohio River, Ohio rivers to its ...
from 1983 to 2012. She was fired and arrested in April 2012 after the discovery that she had
embezzled Embezzlement (from Anglo-Norman language, Anglo-Norman, from Old French ''besillier'' ("to torment, etc."), of unknown origin) is a type of financial crime, usually involving theft of money from a business or employer. It often involves a trus ...
$53.7 million from the city of Dixon for over 22 years to support her championship
American Quarter Horse The American Quarter Horse, or Quarter Horse, is an American breed of horse that excels at sprinting short distances. Its name is derived from its ability to outrun other horse breeds in races of or less; some have been clocked at speeds up to ...
breeding operation, as well as a lavish lifestyle away from work. Her embezzlement has been described as the largest municipal fraud in U.S. history. Crundwell pleaded guilty to her crimes and was sentenced to 19 1/2 years in prison. Crundwell used the 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 The American Quarter Horse Association (AQHA), based in Amarillo, Texas, United States, is an international organization dedicated to the preservation, improvement and record-keeping of the American Quarter Horse. The association sanctions many ...
for eight consecutive years prior to her arrest. She spent years (43% of her sentence) in prison before being released in mid-2021 to serve the remainder of her sentence in home confinement. Her sentence was commuted along with nearly 1500 other people by President Biden on December 12, 2024. Those commuted are those who had been previously transferred from prison to house arrest under the
CARES Act The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a $2.2trillion Stimulus (economics), economic stimulus bill passed by the 116th U.S. Congress and signed into law by President Donald Trump on March  ...
due to having a high risk of COVID-19.


Early life and career

Born Rita Humphrey, the daughter of Ray and Caroline Humphrey, Crundwell grew up on her family's farm near Dixon, and was a student at Dixon High School. In 1970, a year before graduating, the teenager began working at the Dixon City Hall as a work-study student. She began showing
American Quarter Horse The American Quarter Horse, or Quarter Horse, is an American breed of horse that excels at sprinting short distances. Its name is derived from its ability to outrun other horse breeds in races of or less; some have been clocked at speeds up to ...
s in 1978. She married engineering technician Jerry L. Crundwell in 1974, while working as a secretary for Dixon's mayor, but divorced Crundwell in 1986. In 1983, Crundwell was appointed the
treasurer A treasurer is a person responsible for the financial operations of a government, business, or other organization. Government The treasury of a country is the department responsible for the country's economy, finance and revenue. The treasure ...
and
comptroller A comptroller (pronounced either the same as ''controller'' or as ) is a management-level position responsible for supervising the quality of accountancy, accounting and financial reporting of an organization. A financial comptroller is a senior- ...
for Dixon, working in this capacity for almost three decades. 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."


Embezzlement

In 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
invoice An invoice, bill, tab, or bill of costs is a commercial document that includes an itemized list of goods or services furnished by a seller to a buyer relating to a sale transaction, that usually specifies the price and terms of sale, quanti ...
s, 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 2008from 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 A motorhome (or coach) is a type of self-propelled recreational vehicle (RV) which is as the name suggests, like a home on wheels. Features Motorhomes usually have sleeping spaces for two to eight people. Each sleeping space is either fixed o ...
. Crundwell covered up her
embezzlement Embezzlement (from Anglo-Norman, from Old French ''besillier'' ("to torment, etc."), of unknown origin) is a type of financial crime, usually involving theft of money from a business or employer. It often involves a trusted individual taking ...
by claiming that the city's frequent budget shortfalls were due to the state being late in paying its share of
tax revenue Tax revenue is the income that is collected by governments through taxation. Taxation is the primary source of government revenue. Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural reso ...
. 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 The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
, some grew suspicious that Crundwell was stealing money. But the city's outside
auditor An auditor is a person or a firm appointed by a company to execute an audit.Practical Auditing, Kul Narsingh Shrestha, 2012, Nabin Prakashan, Nepal To act as an auditor, a person should be certified by the regulatory authority of accounting an ...
s, 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.


Capture and arrest

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 In many countries, a mayor is the highest-ranking official in a Municipal corporation, municipal government such as that of a city or a town. Worldwide, there is a wide variance in local laws and customs regarding the powers and responsibilitie ...
James Burke. In turn, Burke contacted the
Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...
(FBI). For the next six months, Burke and Swanson (whose payroll was controlled by Crundwell) remained silent while the FBI built their case. Crundwell arrived for work on April 17, 2012, to find FBI agents waiting for her. She was arrested later that day and was
indicted An indictment ( ) is a formal accusation that a person has committed a crime. In jurisdictions that use the concept of felonies, the most serious criminal offense is a felony; jurisdictions that do not use that concept often use that of an indi ...
by a federal
grand jury A grand jury is a jury empowered by law to conduct legal proceedings, investigate potential criminal conduct, and determine whether criminal charges should be brought. A grand jury may subpoena physical evidence or a person to testify. A grand ju ...
for embezzling $53 million in city money over the previous six years. Crundwell was charged with one count of
wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the U.S. Postal Service) or electronic (e.g., a phone, a telegram, a fax, or the Internet) mail system to defraud another, and are U.S. fede ...
and released on $4,500
bail Bail is a set of pre-trial restrictions that are imposed on a suspect to ensure that they will not hamper the judicial process. Court bail may be offered to secure the conditional release of a defendant with the promise to appear in court when ...
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 Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...
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 Restitution and unjust enrichment is the field of law relating to gains-based recovery. In contrast with damages (the law of compensation), restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained. Liability ...
to the city. She reportedly told FBI agents that some of the money was spent on her horses and their upkeep.
Prosecutor A prosecutor is a legal representative of the prosecution in states with either the adversarial system, which is adopted in common law, or inquisitorial system, which is adopted in Civil law (legal system), civil law. The prosecution is the ...
s sought the forfeiture of her horse farm and 300 horses, in addition to her three homes and a luxury motorhome vehicle. Prosecutors later discovered that Crundwell's crimes had begun as early as 1988, when she siphoned off $25,000 from the Dixon Sister City program over two years. Had she not pleaded guilty, she would have faced additional charges of
bank fraud Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many ins ...
, wire fraud and money laundering that could have sent her to prison for the rest of her life. The following month, Dixon's new finance director said that the city had seen an almost $3 million rebound since Crundwell's arrest, but that the operating budget was still off by $16.6 million. It was also reported that Dixon lost $30 million in operating funds over the prior decade. The city sued its outside auditors, as well as the city's banker,
Fifth Third Bank Fifth Third Bancorp is a bank holding company headquartered in Cincinnati, Ohio. It is the parent company of Fifth Third Bank (5/3 Bank), which operates 1,100 branches and 2,400 automated teller machines, which are located in 11 states: Oh ...
, for ignoring numerous red flags in Crundwell's actions. In September 2013, the auditors and Fifth Third agreed to pay the city $40 million in a
legal settlement In law, a settlement is a resolution between disputing parties about a legal case, reached either before or after court action begins. A collective settlement is a settlement of multiple similar legal cases. The term also has other meanings in ...
, while the auction of Crundwell's assets brought in over $9 million. Richard Humphrey Jr., Crundwell's nephew, purchased the horse ranch formerly owned by Crundwell, for $1 million in an auction a few days before she was sentenced. Her brother Richard purchased one of the houses she owned in Dixon. The property includes of farmland that borders another 40 acres of farmland he owns. At sentencing on February 14, 2013, prosecutors sought the maximum sentence of twenty years in federal prison. Their case was bolstered by testimony from Burke and city staffers that Crundwell used dramatic analogies to force spending cuts in order to cover up her theft, which left Dixon unable to provide the most basic services. The
defense Defense or defence may refer to: Tactical, martial, and political acts or groups * Defense (military), forces primarily intended for warfare * Civil defense, the organizing of civilians to deal with emergencies or enemy attacks * Defense industr ...
asked for thirteen years, saying that Crundwell had cooperated with authorities in recovering the money. Ultimately, Reinhard sentenced Crundwell to nineteen years and seven months in prison, close to what prosecutors had sought. Reinhard noted that she put her passion for raising horses ahead of the needs of the city residents who had entrusted her with their funds, and that a significant prison term was required to restore public confidence. Reinhard was so disgusted with Crundwell's behavior that he revoked her bail and remanded her to custody rather than allow her to self-report to prison. Crundwell
appeal In law, an appeal is the process in which Legal case, cases are reviewed by a higher authority, where parties request a formal change to an official decision. Appeals function both as a process for error correction as well as a process of cla ...
ed the sentence, but the
Seventh Circuit Court of Appeals The United States Court of Appeals for the Seventh Circuit (in case citations, 7th Cir.) is the U.S. federal court with appellate jurisdiction over the courts in the following districts: * Central District of Illinois * Northern District of Ill ...
upheld it in November 2013. Crundwell's embezzlement has been the subject of academic and professional publications. On September 20, 2012, Crundwell was also indicted on sixty state counts of theft, alleging that she stole $11.2 million from April 2010 until the day of her arrest. Burke and Lee County State's Attorney Henry Dixon said the state charges, which carried a minimum of six years per count, were a backup in case Crundwell was
acquitted In common law jurisdictions, an acquittal means that the criminal prosecution has failed to prove that the accused is guilty beyond a reasonable doubt of the charge presented. It certifies that the accused is free from the charge of an o ...
on the federal charges. The state charges were dropped in April 2013. Dixon's successor as state's attorney, Anna Sacco-Miller, said that it did not make sense to spend taxpayer money on prosecuting Crundwell, as there were virtually no assets left for the state to seize (though Dixon had initially said he had no plans to seize assets from her). Sacco-Miller also said that because Illinois sentencing guidelines require state and federal sentences to run concurrently, Crundwell would likely serve out any sentence imposed at the state level while she was still in federal prison.


Prison and release

Crundwell was incarcerated at minimum-security
Federal Correctional Institution, Waseca The Federal Correctional Institution, Waseca (FCI Waseca) is a low-security United States federal prison for female offenders in Minnesota. It is operated by the Federal Bureau of Prisons, a division of the United States Department of Justice. Th ...
in
Waseca, Minnesota Waseca ( ) is a city in Waseca County, Minnesota, Waseca County, Minnesota, United States. The population was 9,229 at the 2020 United States census, 2020 census. It is the county seat. Geography According to the United States Census Bureau, t ...
. She was originally eligible and scheduled for release after serving 85% of her sentence (16 years 8 months) on March 5, 2030. Under the
First Step Act The First Step Act, formally known as the Formerly Incarcerated Reenter Society Transformed Safely Transitioning Every Person Act, is a bipartisan criminal justice bill passed by the 115th U.S. Congress and signed by President Donald Trump in ...
she was receiving
good conduct time Good conduct time, good time credit, good time, or time off for good behavior is a sentence reduction given to prisoners who maintain good behavior while imprisoned. In Florida, it is known as gain time. Good conduct time can be forfeited if a p ...
deductions of 54 days per year off her sentence. On April 27, 2020, Crundwell submitted a request for a compassionate release with the warden of the Federal Prison Camp in Waseca. On that same date she filed a motion with the Illinois Northern District Court in Rockford, Illinois. Her motion requested home confinement under the First Step Act. The motion also sought a transfer to home confinement based on a Response to the COVID-19 Pandemic memo dated March 26, 2020 from Attorney General
William Barr William Pelham Barr (born May 23, 1950) is an American attorney who served as United States Attorney General, United States attorney general in the administration of President George H. W. Bush from 1991 to 1993 and again in the first adminis ...
to the
Federal Bureau of Prisons The Federal Bureau of Prisons (BOP) is a Federal law enforcement in the United States, federal law enforcement agency of the United States Department of Justice that is responsible for all List of United States federal prisons, federal prisons ...
. Crundwell cited, amongst other things, her "health issues, including high blood pressure and high cholesterol" and her good conduct while incarcerated. The motion was withdrawn by Crundwell on May 18, 2020, a few days after Dixon City Council strongly opposed an early release. The motion withdrawing the home confinement request was granted on May 21, 2020. A little over a year later, on August 4, 2021, after serving half of the required 85% of her sentence (about years), she was released by the Federal Bureau of Prisons (i.e. not by a court) on compassionate grounds to a ''residential reentry center'' - a
halfway house A halfway house is a type of prison or institute intended to teach (or reteach) the necessary skills for people to re-integrate into society and better support and care for themselves. Halfway houses are typically either state sponsored for those ...
or a home confinement, possibly her brother Richard Humphrey's ranch (farm) in Dixon as she proposed in her previously withdrawn request for release. Two months later in October 2021 she was reported to live at the brother's 80-acre farm. Because she is serving her sentence in home confinement she's not allowed to leave the farm property without permission. She was overseen by a residential reentry management field office in Chicago suburb
Downers Grove Downers Grove is a village in DuPage County, Illinois, United States. It was founded in 1832 by Pierce Downer, whose surname serves as the eponym for the village. Per the 2020 census, the population of the village was 50,248. It is a south-west ...
. Her release date was listed as October 20, 2028. On December 12, 2024, Crundwell's sentence was commuted by President
Joe Biden Joseph Robinette Biden Jr. (born November 20, 1942) is an American politician who was the 46th president of the United States from 2021 to 2025. A member of the Democratic Party (United States), Democratic Party, he served as the 47th vice p ...
along with nearly 1500 other individuals that were previously released under the CARES Act, which allowed people with a high risk of COVID-19 to be released from prison into home detention. Crundwell's story was featured on the January 15, 2025 edition of Freeform's ''Scam Goddess'', hosted by Laci Mosley.


In popular culture

*
CNBC CNBC is an American List of business news channels, business news channel owned by the NBCUniversal News Group, a unit of Comcast's NBCUniversal. The network broadcasts live business news and analysis programming during the morning, Day ...
's '' American Greed'' ( episode 83, ''The Cunning Cowgirl Crook'') *
CBC CBC may refer to: Media * Cadena Baja California or Grupo Cadena, a radio and television broadcaster in Mexico * Canadian Broadcasting Corporation, Canada's radio and television public broadcaster ** CBC Television ** CBC Radio One ** CBC Music ** ...
's '' The Fifth Estate'': *''All the Queen's Horses'', a 2017 documentary directed by forensic accountant Kelly Richmond Pope and distributed by
Kartemquin Films Kartemquin Films is a four-time Oscar-nominated 501(c)3 non-profit production company located in Chicago, Illinois, that produces a wide range of documentary films. It is the documentary filmmaking home of acclaimed producers such as Gordon Quinn ( ...
, focused on Crundwell *
Illinois Channel The Illinois Channel is a 501 c (3) nonprofit corporation, modeled after C-SPAN, which produces programming on Illinois state government, politics and public policy. Early history In 1999, Barbara Ferrara, of the University of Illinois at Spring ...
: *''The Talented Miss Farwell'' by Emily Gray Tedrowe, published September 2020, is a novel inspired by the Crundwell case *'' Swindled'' podcast, Season 1, Episode 2, ''The Horse Queen'' *'' Scam Goddess'' podcast, September 11, 2023 episode ''The Govt. Horse Hustler w/ Adam Conover''


References

{{DEFAULTSORT:Crundwell, Rita 1953 births American accountants American women accountants American people convicted of fraud American people convicted of money laundering Crundwell Illinois politicians convicted of crimes Living people Politicians convicted of embezzlement Crundwell Crundwell Crundwell Commutations granted by Joe Biden