Woman who found the first crack in Crundwell crime honored in Dixon

DIXON – North of 1,800 people came to see the story of how Rita Crundwell stole $53.7 million across 2 decades, but the former City Comptroller wasn’t the one in the spotlight this weekend.

That honor was reserved for former longtime City Clerk Kathe Swanson, who discovered Crundwell’s secret account where she funneled as much as $5 million of taxpayer dollars in a year into her personal coffers and quarterhorse breeding empire before being arrested April 17, 2012.

The arrest came 6 months after a Federal Bureau of Investigations probe into Crundwell’s misdealings, time when Swanson and former Mayor Jim Burke had to wait tight-lipped until a strong enough case was built to uncover what’s being called the largest municipal fraud in U.S. history.

Swanson received national recognition Sunday following the second free showing of the Crundwell documentary “All the Queen’s Horses” at the Historic Dixon Theatre.

A sold-out crowd of about 900 people gave Swanson a standing ovation after she was presented with the National Association of State Boards of Accountancy’s Ethical Courage Award.

She had a similar, albeit smaller, reception a year ago when she retired after working about 25 years for the city.

Interviews with Swanson take a front seat in the documentary, one that’s much deserved, said film Director Kelly Richmond Pope, an accounting professor at DePaul University.

“The whole time, people thought it was all about Rita, but it’s largely about Kathe’s courage and the amount of bravery she exhibited to come forward,” she said.

Pope interviews white-collar felons, fraud victims and whistleblowers and uses those stories as teaching modules in her classes.

The goal of the 71-minute movie is to serve as a lesson to others – be it municipalities, big corporations or small nonprofits – on how fraud can happen anywhere, and the importance of those who unearth it.

“Whether she realizes it or not, she empowers people,” Pope said. “She represents a population of a lot of people who see injustice and have to make that decision to come forward.”

The documentary was developed through the Diverse Voices and Docs fellowship program with Chicago-based Kartemquin Films, and it debuted at the Martha’s Vineyard African American Film Festival on Aug. 8, where it won the HBO Documentary Films Spotlight Award.

It came to Dixon for a private screening last month at Crundwell’s former estate, where investigators found records of her embezzlement boxed up in the basement, and the public showings were sponsored by financial reporting software company Workiva based out of Ames, Iowa, and Chicago-based BMO Harris Bank.

Pope said many residents see Crundwell’s actions as a scar upon the city, but it’s an example that can be used to teach others and prevent future fraud.

“What they see as a bad thing will grow into something really beautiful,” she said. “I’m excited because Dixon will help people they never even thought of.”

In 2013, Crundwell was sentenced to serve 19 years and 7 months in a Minnesota prison, just 5 months shy of the maximum penalty.

She began embezzling from the city in 1991, taking about $181,000, and by 2008, she stole north of $5 million a year. She would transfer city money into the Reserve Sewer Capital Development Account she created, which paid for her lavish lifestyle that included more than 300 horses at 22 farms across 13 states.

At the same time, the city was accumulating about $20 million in debt.

She created 179 false invoices for phony capital projects for 2 decades spanning five city councils and three mayors.

The documentary featured interviews with forensic accountants, equestrians, attorneys, government officials and local residents.

The film will make its Chicago premiere Nov. 10 at the Gene Siskel Film Center and run until Nov. 22.

MORE INFORMATION

Go to allthequeenshorsesfilm.com or find All the Queen's Horses documentary on Facebook for more information and upcoming screenings.