Illinois city official accused of stealing $30M from taxpayers

The finance chief for a small city in northern Illinois has been arrested and charged with stealing more than $30 million from the city coffers and using the money to sustain a luxurious lifestyle.

MyFoxChicago reports that Rita Crundwell, 58, the comptroller of Dixon, is accused of using city funds to finance her horse farm and buy expensive items ranging from tractor-trailer trucks to a motor home to jewelry.

She held the position as comptroller since the early 1980s, in the boyhood home of former President Ronald Reagan. The federal complaint against her alleges that she embezzled more than $3.2 million just since last fall. That's on top of a salary of $80,000.

She allegedly bought a $2.1 million motor home, in addition to several trucks that cost as much as $147,000, according to the report.

Dixon Mayor James Burke called the allegations a "traumatic event" for the city.

According to a criminal complaint, the siphoning of city funds went undetected for years until another staffer filling in as vacation relief became suspicious and discovered a secret bank account. How an enormous sum -- it dwarfed the city's current annual budget of roughly $8 million to $9 million -- could be stolen and escape the notice of a yearly audit left many puzzled.

A Chicago-based corruption watchdog, the Better Government Association, called it a wakeup call for state and local officials to put in place better safeguards, especially in smaller towns that lack rigorous oversight.

"Tens of billions of our tax dollars flow through 7,000 plus units of government in Illinois every year. And we can only watch a few of them," said the association's president, Andy Shaw. "Most of them don't have inspector generals. Most of them don't have auditor generals. Most of them don't have watchdog groups looking closely. ... It's ripe for ripoffs."

Dixon, a city of about 16,000 people west of Chicago, was especially vulnerable because Crundwell, who has been comptroller since the early 1980s, had control over all of the city's finances, a common arrangement in smaller cities and towns.

Federal prosecutors say she misappropriated more than $30 million since 2006.

Crundwell is free on a $4,500 recognizance bond. A federal judge barred her Wednesday from selling any property while the wire fraud case proceeds, and limited her travel to northern Illinois and to Wisconsin, where she has horse ranches.

Agents searching her home, office and farms in Dixon and Beloit, Wis., seized seven trucks and trailers, three pickup trucks, the motor home and a Ford Thunderbird convertible -- all allegedly bought with illegal proceeds. Authorities also seized the contents of two bank accounts she controlled.

Between January 2007 and March of this year, she is accused of racking up more than $2.5 million on her personal American Express card -- including $339,000 on jewelry -- and using Dixon funds to pay back the charges.

Prosecutors say she used $450,000 in stolen funds for operations at her Meri-J Ranch, where she keeps about 150 horses.

Crundwell is one of the top horse breeders in the nation. Her ranch produced 52 world champions, according to the American Quarter Horse Association in Amarillo, Texas, the world's largest equine breed registry and membership organization.

Dixon placed Crundwell on administrative leave without pay and named a new interim comptroller.

Trying to explain how that much money could disappear unnoticed, Burke said Dixon has struggled financially with big infrastructure expenditures, reduced revenues and cash flow problems made worse because the state is far behind on income tax disbursements. That provided plausible reasons to think the extra hole in the budget was related to those financial problems, he said.

How Crundwell could sustain such an extravagant lifestyle on an $80,000 salary was mostly attributed to her success in the horse industry, Burke said.

"She definitely was a trusted employee, although I've had some suspicion for quite a while just because of her lifestyle she lived," Burke said in an interview. "But there wasn't anything that was brought to my attention or that I could see that would give cause to think that there was something going on."

Click to read more from MyFoxChicago.

The Associated Press contributed to this report.