2013 events in the Rita Crundwell scandal

Jan. 2

The U.S. Marshals Service says it has entered into contracts with buyers who would pay more than $3 million for three of Rita Crundwell’s five properties – 1403 Dutch Road and 1556 Red Brick Road and about 81 acres of farmland. It later announces that the Red Brick Road property was bought by Crundwell’s nephew and his wife for $1.13 million. The Dutch Road property was sold to Crundwell’s brother.

Jan. 7

Commissioner David Blackburn announces the city’s payroll now is being completed in-house. “This was one of the primary objectives outlined last summer in an effort to improve internal controls” as a result of former Comptroller Rita Crundwell’s theft of nearly $54 million from city accounts, Blackburn said.

Jan. 15

At least as early as 2010, CliftonLarsonAllen knew about the secret bank account that former Comptroller Rita Crundwell used to steal nearly $54 million – but did not investigate it, according to court documents.

Jan. 25

The Illinois Department of Financial and Professional Regulation sends a letter to the Lee County Circuit Clerk’s office to say it might launch an investigation into auditing firms that, the city says, failed to detect Crundwell’s theft.

Jan. 31

Court documents reveal what Rita Crundwell stole from the city between 1991 and 2012. Of the more than $55 million in city funds she deposited into her secret bank account over two decades, only about $1.34 million actually went back to the city for expenses.

She spent the rest – nearly $54 million – to build up her world-renowned horse-breeding business, travel around the country for horse shows, renovate several homes, and buy expensive jewelry.

She also “turned a blind eye” to the fact that the city faced severe financial hardship and was forced to reduce the services it provided to citizens, according to federal prosecutors.

Feb. 5

Crundwell attorney Paul Gaziano writes in a court memorandum that the former comptroller should be sentenced to fewer than the maximum 20 years in prison. He cites Crundwell’s cooperation in the investigation and help she provided the U.S. Marshals Service in liquidating her assets.

In its presentence report, the federal probation department advises the judge that Crundwell should face 13 to 16 years in prison.

Feb. 11

In response to the city’s claim that auditors should have detected Crundwell’s theft, a court filing by the attorney for local auditors Janis and Samuel Card says the city was careless and negligent with its own finances. “It was the duty of the Plaintiff to use ordinary care to protect its own financial assets,” the document says.

Feb. 12

Prosecutors in court documents say Crundwell might have started stealing from the city nearly 2 years before she opened the secret bank account through which she filtered money. They say Crundwell took at least $25,000 from Dixon’s Sister Cities Association account between August 1988 and May 1990.

Further, prosecutors say, Crundwell did not cooperate immediately with investigators: She lied to FBI agents at first about how much money she had taken and when, according to the documents.

Feb. 13

In court documents, prosecutors say Crundwell wrote checks and made online payments from the secret Reserve Capital Development Account to pay personal and business expenses. In September 2009 alone, she wrote 47 checks to pay a variety of bills for horse training, utilities, vehicles, and western-themed belts and buckles.

Feb. 14

On Valentine’s Day, Crundwell is led away from federal court in handcuffs minutes after a judge sentences her to 19 years, 7 months in prison for wire fraud. Crundwell, then 60, must serve 85 percent, or 16 1/2 years, of the sentence. U.S. District Judge Phillip Reinhard also serves Crundwell with a bill for $53,740,394, the amount she took over 22 years from the city.

Crundwell is taken to the Boone County Jail to await a federal prison assignment.

Feb. 19

City commissioners say they would like the state to move “full steam ahead” with charges against Crundwell. In Lee County, she faces 60 counts of theft for stealing more than $11 million from the city since January 2010. “Given the magnitude of the crime to the city, I’d like to see the evidence pursued,” Commissioner Colleen Brechon said.

Feb. 20

Lee County Public Defender Bob Thompson, who represents Crundwell in her state theft case, files a motion to ask the judge to dismiss charges, citing potential double jeopardy.

Feb. 23

All 229 pieces of jewelry belonging to Crundwell and her boyfriend are sold, for a total of $258,375, in live and online auctions.

Feb. 25

Crundwell’s attorneys appeal the length of her sentence.

March 1

CliftonLarsonAllen claims the city is to blame for Crundwell’s theft. In a response filed in court, the accounting firm says the commission form of government required enhanced levels of control and supervision by the city’s elected officials. Instead, the filing says, the city gave Crundwell total control over its finances, accounting, bookkeeping, cash and Capital Development Fund.

March 15

The city adds Fifth Third Bank to the list of entities it is suing in the aftermath of Crundwell’s theft. In an amended lawsuit filing, the city says Fifth Third was negligent in applying commercial bank standards.

April 30

Citing a desire to save taxpayers about $300,000 on a “futile” trial, Lee County State’s Attorney Anna Sacco-Miller dismisses theft charges against Crundwell. Sacco-Miller calls further prosecution “futile” because it would not mean more prison time for Crundwell or additional restitution to the city of Dixon.

May 2

Crundwell is transferred to the Metropolitan Correctional Center in downtown Chicago. It’s a short-term holding facility for federal prisoners of all security levels.

May 9

Three vehicles – the last of Crundwell’s tangible assets – are sold in an auction for a total of $35,900.

May 16

Former City Engineer Shawn Ortgiesen is given a notice to appear before the U.S. Attorney’s Office in regard to the recovery of assets in the Crundwell case. Documents seized from City Hall after Crundwell’s arrest included personal loan agreements that Crundwell had with Ortgiesen and his wife, as well as with Fire Chief Tim Shipman and his wife. Shipman later receives the same notice.

June 3

Crundwell is transferred to a minimum-security Federal Correctional Institute for women in Waseca, Minn., where she will serve the remainder of her sentence.

July 8

CliftonLarsonAllen sues Fifth Third Bank in a cross claim, saying the bank did not share its knowledge of the secret account Crundwell used to steal nearly $54 million.

July 10

Crundwell’s attorney asks the federal court of appeals to reconsider her prison sentence, saying the U.S. District Court in Rockford abused its discretion and did not give enough weight to Crundwell’s cooperation with authorities.

July 15

The Dixon City Council approves a surplus budget for fiscal year 2013-14 that includes an anticipated $10 million in restitution from the sale of Crundwell’s assets.

Aug. 1

Lt. Gov. Sheila Simon says state Comptroller Judy Baar Topinka failed to serve her role as watchdog over local government accounting while Crundwell was stealing from Dixon. Simon is seeking the Democratic nomination for comptroller. A Topinka spokesperson calls Simon’s comments “absurd.”

Sept. 25

The city of Dixon announces it has reached a $40 million out-of-court settlement with its former auditors and Fifth Third Bank, who, the city said, were to blame for Crundwell’s theft. The money was expected to be handed over to the city by the end of the year. With an additional $10 million expected from the federal government’s sale of Crundwell’s assets, Dixon will have recouped $50 million. About $10.3 million of the settlement will go toward legal fees.

Oct. 10

About 200 residents and media fill roughly three-fourths of the auditorium at Loveland Community House for a discussion about how to spend the $40 million coming to the city. Residents suggest such ideas as paying off city debts, granting tax abatements, and spending for recreational projects.

Nov. 15

Calling her sentence of 19 years, 7 months in federal prison “substantively reasonable,” an appeals court panel rejects an attempt by Crundwell to shorten her term. Next, Crundwell may ask that her appeal be heard by the entire 7th U.S. Circuit Court.