Ex-Dixon comptroller Crundwell sentenced to 19 years, 7 months

ROCKFORD – Saying she is “truly sorry,” a tearful Rita Crundwell was sentenced this morning to 19 years, 7 months in federal prison for pulling off what may be the biggest municipal theft in U.S. history.

The sentence is just 5 months shy of the maximum 20 years allowed. She will be on supervised release for 3 years after her sentence is served.

The disgraced former comptroller also must repay the city the nearly $54 million she stole to pay for, among other things, her nationally renowned prize herd of 400 quarter horses, her ranch in Dixon, her vacation home in Florida, luxury cars and motor home, furs, jewelry and all the trappings of a wealthy lifestyle – an unlikely feat, since the sale of most of her assets so far has brought only about $11 million.

The 60-year-old must serve at least 16 and a half years, or 85 percent of her sentence.

U.S. District Court Judge Philip Reinhard said she will serve her time in a prison near Beloit, Wis. where her longtime boyfriend lives. Waseca (Minn.) Federal Correctional Institute, a low-security federal women's prison, is about 300 miles from Beloit.

Crundwell pleaded guilty in November to wire fraud, admitting to stealing the staggering total over more than 20 years.

A presentence report that took into account the nature of her crime and the extent of her cooperation, among other things, recommended she be sentenced to between 12 and a half and 16 years.

Her public defender asked the judge for the lower end of those guidelines, while prosecutors sought the high end, up to the full 20.

Reinhard said the theft of $53.7 million was "enough aggravation" to warrant the lengthy sentence.

A number of city officials and employees testified this morning, including Mayor Jim Burke, who has known Crundwell since 1967, when she was in high school working part-time for the city. He asked the judge to give Crundwell the maximum sentence, and told her he hoped "she finds purpose in her life."

Crundwell, who had been comptroller since at least May 1983, opened a bank account she called the Reserve Sewer Capital Development Account, or RSCDA, at First Bank South, now Fifth Third Bank, in December 1990.

Since then, she funneled nearly $54 million from various city funds in and out of that account.

The trusted financial officer, who was making $83,400 a year and who had sole oversight of the city's purse, took the bulk of the money, more than $44 million, between April 30, 2002, and her arrest on April 17, 2012.

She did so in part by creating more than 179 fraudulent invoices showing the city paying money to the Illinois Department of Transportation.

Unlike official state invoices, these did not have IDOT’s emblem or logo, did not include a contact name and number of an IDOT employee, were written using a different typeface than IDOT uses, and the word “section” was misspelled.

The deception went unnoticed by accountants who did the city's annual audits.

The city, though, which has an annual budget of about $7 million, began to feel the pinch, especially in the last decade, when tight budgets meant roads went unrepaired, city services were cut back and employees did not get raises.

Crundwell blamed the cash-flow problems on late payments from the state.

On the day of her arrest, Crundwell at first lied about the scope of her crime, telling FBI agents that she opened the account in 1999 or 2000 and that she took only $10 million.

The federal case is resolved, but Crundwell still faces state charges in Lee County County Court, where she is charged with 60 counts of theft for stealing more than $11 million from the city since January 2010. If convicted, that sentence will run concurrent to the federal sentence.

Her Lee County public defender, Bob Thompson, is considering filing a motion to dismiss that case, though, on the grounds that it may constitute double jeopardy