Rita returns: Crundwell transferred to federal prison in Pekin

DIXON – The day before the 6-year anniversary of her arrest for stealing $54 million from the Petunia City, Rita Crundwell, arguably the world's most successful municipal swindler, arrived back in the land of Lincoln.

Crundwell, now 65, has been housed in the Pekin Federal Correctional Institution in Tazewell County, barely 2 hours away from her family in Dixon, for a week and a day.

Waseca, Minnesota, her first federal address, is nearly 6 hours away from her still bruised and bitter hometown.

As of today, the former city comptroller has served 58 months and 21 days of her 235-month sentence.

According to the Bureau of Prisons Information, Policy and Public Affairs Division, Crundwell was at FCI Waseca from June 3, 2013, to Jan. 25, 2017, when she was transferred to the Federal Medical Center in Carswell, Texas.

Federal health privacy laws prohibit the department from explaining why she was at Carswell for more than 15 months, but she was transferred to the Federal Transfer Center in Oklahoma City, Oklahoma, on April 10, and to Pekin 6 days later.

Pekin FCI is a medium-security facility with an adjacent minimum-security satellite prison camp, which is where she is housed.

Crundwell was arrested April 17, 2012, at City Hall, and sentenced the following Valentine's Day to 19 years, 7 months – 5 months fewer than the maximum penalty allowed for the wire fraud for which she was convicted. No sweetheart deal for her when it came to sentencing.

Emailed questions posed to the BOP Wednesday and answered late Monday about why prisoner No. 44540-424 was transferred – with 14+ years left to serve and still owing the city just shy of $100 million in restitution – were met with somewhat general replies and referrals to links on the agency's website.

In general, and slightly edited:

Q: What's the process for getting a transfer?  Does an inmate have to show a need, or provide a reason for a transfer, and if so, what was hers?

A: Factors include, but are not limited to, the level of security and supervision the inmates require and their medical and programming needs.

General information regarding the designation process, including transfers, is provided on the Bureau of Prisons' website at shawurl.com/396f. More information can be found in BOP Program Statement 5100.08, "Inmate Security Designation and Custody Classification" here.

Specific information about a particular inmate is not public information, but obviously, if Crundwell is being held in a minimum-security prison camp, she's designated low-risk.

According to the web page, any request for transfer must originate with an inmate's institution unit team at his or her current facility. The BOP's Designation and Sentence Computation Center evaluates referrals and makes transfer decisions based on the information provided by the institution.

Inmates are encouraged to work closely with members of their institution unit team to determine if a transfer to a facility closer to their release residence may be possible, the web page says.

Q: What's the difference between a federal prison and a prison camp?

A: Please see our web page that describes each type of  BOP facility here: shawurl.com/396i.

We did. It says the BOP has 122 prisons – "we call them 'institutions'"– that operate at five security levels "based on such features as the presence of external patrols, towers, security barriers, or detection devices; the type of housing within the institution; internal security features; and the staff-to-inmate ratio."

Minimum-security institutions, also known as federal prison camps, have dormitory housing, a relatively low staff-to-inmate ratio, and limited or no perimeter fencing.

A number (including Pekin) have a small, minimum-security camp adjacent to the main facility, referred to as a satellite prison camp. The camps provide inmate labor to the main institution and to off-site work programs.

Q: Crundwell is supposed to be paying restitution, so will she have a job at Pekin? Doing what?

A: All inmates who are medically able must work while in federal prison. For privacy reasons, we do not share whether a specific inmate is working or if working, what a specific inmate's job may be.

More information may be found on the BOP's Work Programs web page, shawurl.com/396j, and in BOP Program Statement 5251.06 "Inmate Work and Performance Pay" here.

According to the web page, work assignments include employment in areas like food service or the warehouse, or work as an orderly, plumber, painter, or groundskeeper. The accompanying photo on the website shows two men working in a laundry.

Inmates earn 12 to 40 cents an hour, so assuming she's a top earner – as her history in the horse ring certainly suggests – it would take Crundwell about 250,000,000 hours – or 28,538 years – to repay the $98 million she still owes.

In actuality, she's paying restitution at a pace of about $65 to $70 a month, minus the 15 months in medical lockup.

What her earning potential will be when she's released at age 79 remains to be seen.

So, what about the money the city has recovered?

After Crundwell's conviction, the city reached a $40 million settlement with its former auditors and bank, which failed to spot 20 years of siphoning of its revenue; a quarter of that – about $10 million – went to lawyer fees.

The city then received $10.45 million from the U.S. Marshal Service's auction and online sales of Crundwell's assets, which included roughly 400 award-winning quarter horses, her Dixon ranch and home, and her Florida vacation home.

Of that $40+ million, the city used $12,572,318 to pay off general obligation debt, largely for capital projects, and $8,678,083 borrowed from mostly restricted city funds, for a total of $21,250,401.

The rest was used to set up two reserve pools, one with $5 million as a rainy day fund – enough to operate the city for 6 months without revenue – and an emergency capital fund of $3 million.

In spring 2014, nearly $3,960,110 was spent on the River Street revitalization project, and nearly $1.1 million went toward repairs and renovations at the Dixon Public Library.

In June 2015, $856,538 was used to make emergency repairs to a portion of West Seventh Street that collapsed following a heavy rain, $25,000 was put toward tearing down derelict property, and $15,000 was given to the Dixon Sister Cities Association.

Recently, $210,215 was set aside to match a $2 million Illinois Transportation Enhancement Program grant to extend the city bike path.

For those of you counting along, that's about $35.5 million spent or put in reserve, leaving the rest – about $4.7 million as of this month – left in what the city calls the recovery fund.

City officials have said they plan to use the remainder of the money on projects that enhance the city and the lives of its residents.

THE DOCUMENTARY

"All the Queen's Horses," a 71-minute documentary on former City Comptroller Rita Crundwell's $53.7 million embezzlement, is available on demand on more than 20 providers and platforms, including Comcast, DirecTV, Dish Network and Mediacom, iTunes, Google Play, YouTube and Amazon Prime.

The film is about Crundwell's theft across 2 decades that funded her quarterhorse breeding empire and lavish lifestyle before her arrest in 2012 in the largest municipal fraud in U.S. history.

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