Question
Rita Crundwell was the comptroller for the city of Dixon, IL, from 1983 through early 2012.During that time, she stole millions of dollars from the
Rita Crundwell was the comptroller for the city of Dixon, IL, from 1983 through early 2012.During that time, she stole millions of dollars from the city to fund her extravagant lifestyle related to breeding and showing quarter horses.While maintaining this lavish, high-profile lifestyle, Crundwell received an annual salary of $80,000 from the city.Apparently, the discrepancy between her salary and lifestyle went unnoticed by her supervisors or the city's auditors.Crundwell handled all of the city's finances, and it appears that she was left relatively unsupervised by the city's leadership.Most shocking is the magnitude of the theft - over $50 million - in relation to the size of the community.Dixon, a small town about 100 miles southwest of Chicago, has a population of fewer than 16,000 people.It is difficult to understand how the leadership of a city so small could have not realized that the massive amount of funds was missing.
The fraud began late in 1990, when Crundwell opened a bank account in the joint name of the city of Dixon and an acronym, RSDA.The account holder was listed as "RSDA, c/o Rita Crundwell."RSDA was purportedly the city's capital development fund.Crundwell transferred funds from Dixon's money market account to the RSDA fund, as well as to various other city-held bank accounts.Crundwell then wrote checks from the RSDA account to pay for her personal expenses, including expenses relating to her horse business.To conceal the fraud, Crundwell created fictitious invoices from the state of Illinois, made to look as through the funds she was fraudulently depositing into the RSDA account were being used for a legitimate city purpose.
To give a sense of the magnitude of the fraud, Crundwell charged about $2.5 million to her American Express card between Jan 2007 and March 2012; this included charges of $339,000 on jewelry alone.Between Sept 2011 and March 2012, she wrote 19 checks worth $3,558,000 from a city account payable to "Treasurer"; she deposited these checks into the RSDA account.She then took $3,311,860 from the RSDA account by checks and online withdrawals, using only $74,274 for the city's actual operations.Crundwell used the remainder of those funds for personal and business expenses, including approximately $450,000 relating to her horse farming operations, $600,000 in online credit card payments, and $67,000 to purchase a 2012 Chevy Silverado pickup truck.After the fraud was discovered, the FBI seized, among other items, the following from Crundwell:
311 quarter horses
2009 Liberty Coach motor home: $2.1 million
2009 Kenworth T800 tractor truck: $146,000
2009 Freightliner truck: $140,000
2009 Chevrolet Silverado pickup truck: $56,646
2009 Featherlight horse trailer: $258,698
The fraud unraveled when Crundwell took a 12-week unpaid vacation during 2011.While she was away, a city employee who serves as her replacement obtained bank statements from all of the city's bank accounts.After reviewing those statements, the employee contacted the city's mayor, Mayor Burke, to alert him that one particular account had unusual transactions within it.Specifically, the Sept 2011 statement for that account showed three deposits totaling $785,000, as well as 84 checks drawn totaling $360,493, and 40 withdrawals totaling $266,605.Burke was unaware that the account even existed, and it was apparent that the withdrawals had no legitimate purpose relating to the city's business.Crundwell was sentenced to nearly 20 years in prison after pleading guilty to a wire fraud count.
1.What parties involved in this actual case are to blame for this massive fraud, and how are they to blame?
2.Research on the internet any subsequent developments in this case (e.g. how much of the loss has been recovered.)
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