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DIXON – Two city employees who received personal loans from embattled comptroller Rita A. Crundwell said Tuesday they believed her money came from her horse business.
Crundwell was arrested April 17 on a federal wire fraud charge; that day, the FBI seized documents and assets from her office at City Hall; her Dixon home and horse ranch; her company, RC Quarter Horses Inc.; and another horse ranch in Beloit, Wis.
Prosecutors say Crundwell, the city’s top financial officer since 1983, misappropriated more than $30 million in taxpayer money since 2006. She faces up to 20 years in prison, plus fines and restitution if convicted.
Monday, prosecutors released inventory sheets of everything seized, including finance, mortgage and real estate records.
Among the documents found at City Hall was paperwork showing Crundwell made loans to Dixon Fire Chief Tim Shipman and his wife, Diane, and to Public Works Director and City Engineer Shawn Ortgiesen and his wife, Angela.
Randall Samborn, public information officer for the U.S. Attorney’s office in Rockford, said he could not comment on individuals “who have not been charged,” adding: “I urge you not read anything into my ‘no comment.’”
The FBI inventory sheet from the City Hall search warrant does not disclose the amounts or the terms of the loans, what they were used for, or when they were given.
Ortgiesen also declined to say how much or what his loan was for, but he did say Tuesday that he has been making regular payments at 4 percent interest on the 10-year note.
“I did approach Rita for a loan,” Ortgiesen said. “I thought she had money from the horses. ... I totally trusted her. We had a citywide meeting, and I said, ‘It’s not like getting punched in the gut; it’s like getting shot in the head.’”
He now regrets the loan and is talking with the FBI about how to handle it and the repayment, Ortgiesen said.
Shipman said he approached Crundwell for a personal loan in 2008. He said it was a “fairly short-term” loan with a 1 percent interest rate, but he also declined to provide any more details.
Ortgiesen and Crundwell were work friends, Ortgiesen said. City employees would go out after council meetings and sometimes back to Crundwell’s house.
Shipman has known Crundwell and her family a long time, he said. He worked on her house 6 to 8 years ago through a part-time job he had with Slain Construction, and as recently as last fall, he would drive her trailers back to Dixon from horse shows.
“I needed some assistance, and I approached her as a friend,” Shipman said. “Rita’s reputation prior to this, she was the most giving person and she assisted people.”
The FBI inventory sheet also lists a 1994 loan record titled “re: cap. dev., show horses’ record,” which includes a recommendation letter that Crundwell wrote for Shipman.
Shipman said he thinks the recommendation would be for his promotion to lieutenant 7 or 8 years ago, a process that goes through the firefighters union.
Mayor Jim Burke said Monday that he does not think other city employees were involved in the apparent misappropriation.
“When this investigation was under way, the FBI raised some questions about different individuals,” Burke said.
“Shortly before this came down, I asked them if they had found any evidence about any of these other city employees being involved, and they said there was nothing to lead them to that.”
Burke told Sauk Valley Media that taking out the personal loans did not violate city policy.
“We don’t see where [Ortgiesen] compromised himself or put himself into any conflict,” Burke said. “He’s part of this core group working on a daily basis to get everything out in the open, to get the financial house in order, to get a new interim comptroller. He’s a core part of this whole thing.
“As mayor, I don’t see where he’s connected in any way, shape, or form, or that he was involved any wrongdoing.”
Police Chief Danny Langloss, who was in on the Tuesday morning phone interview with Burke, as was Ortgiesen and Commissioner Colleen Brechon, said if Crundwell hadn’t been arrested, the loans wouldn’t be an issue.
“There were legal, binding documents,” Langloss said. “This wasn’t a gift. This was a legal, binding document with an interest rate and everything else.”
Also on the inventory was a $2,000 loan agreement between Crundwell and Donald Wolber.
Wolber could not be reached for comment Tuesday, and Sauk Valley Media was unable to determine what, if any, relationship he has to Crundwell. He is not a city employee, according to city records.
Samborn said Tuesday that no other search warrants have been served. He declined to say whether any other search warrants are pending, or whether anyone else is under investigation.
He also declined to say where the seized items are being held, saying only that they are in “federal custody.”
In a special meeting Monday, the City Council voted unanimously to fire Crundwell.
She is free on a $4,500 recognizance bond, the terms of which prohibit her from working in a job in which she will handle money, from selling any property or horses, and from traveling outside northern Illinois or western Wisconsin.
She also cannot touch two bank accounts, one an RC Quarter Horses account and the other labeled “RSCDA”, which between them had about $225,000.
City officials became suspicious of Crundwell and called investigators when a secret account that did not appear to be related to any legitimate city business was discovered while she was on vacation.
The name on the account was “RSCDA, C/O of Rita Crundwell.” Prosecutors say she used that account to shift around city money, and that she used it to write checks and make withdrawals of city money that she used to pay personal expenses.
Inventory of seized assets
On April 17, federal agents searched Rita Crundwell's home, horse ranches, and City Hall office. They seized vehicles, including a 2009 Liberty Coach Motor Home worth more than $2.1 million, jewelry, guns, art, laptops, documents and other items. Among them:
From City Hall, 121 W. Second St.
n Three ledgers for the Capital Development, Sales Tax, and General A/C accounts.
n An Apple Mac Mini, with a base value of $599, according to www.apple.com.
n A Verizon cellphone bill with 9 different phone numbers associated with Crundwell.
n RC Quarter Horse LLC checkbook, ledger, and bank statements.
n Horse records, including an Allen Equine account summary, personal account documents and many payment notices from the Ohio Quarter Horse Association.
From 1679 U.S. Route 52, site of a single-family home and Rita's Ranch.
n Tax and bank records, notice of audit information, city of Dixon pay stubs.
n A 2007 Hummer, with a manufacturer's suggested retail price of $54,110.
n Assorted jewelry, six watches, three pairs of shoes, four handbags, two pairs of sunglasses and several pieces of art.
n Apple Macbook Air, with a base value of $999.
n An antique lever-action rifle, an antique rifle, and another lever-action rifle.
n Seven World Champion recognition plaques, a world champion trophy; a AQHA Congress trophy; and a buckle, all from the AQHA.
n Horse registration certificates, address information, and horse records.
From 1556 Red Brick Road, site of RC Quarter Horses LLC
n A 2010 GMC Terrain, with a manufacturer's suggested retail price of $25,560.
n A 2009 Heartland Cyclone 3950 fifth-wheel trailer.
n A 2005 Chevy Silverado pickup.
n A 2012 Featherlite 40-foot gooseneck car trailer.
From the Meri-J Ranch, 1114 E. Colley Road, Beloit, Wis.
n A 2009 Kenworth T800 Tractor Truck, worth $146,787.
n A 2012 Chevrolet Silverado 3500 pickup with a manufacturer's suggested retail price of $30,590.
n A 2009 Freightliner truck, worth $140,000.
n A 2009 Featherlite horse trailer, worth $258,698.
From the banks
n An account at Fifth Third Bank, 102 S. Galena Ave., Dixon, labeled RSCDA, with $191,357.75.
n The RC Quarter Horses account at First National Bank in Amboy, 220 E. Main St., with $33,540.32.