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Crundwell is sentenced to 19 years, 7 months

ROCKFORD — Rita Crundwell will be at least 77 years old when she walks out of prison.

Dixon’s disgraced former comptroller was led away in handcuffs Thursday, just minutes after a federal judge sentenced her to 19 years, 7 months, for wire fraud.

The 60 year old must serve 85 percent, or 16 and one-half years of the sentence. When she is freed, she will be subject to three years of federal supervision.

U.S. District Judge Philip Reinhard also served Crundwell with a bill for $53,740,394, the amount she took throughout 22 years from the city’s coffers to fund her nationally-renowned quarter horse business and lavish lifestyle.

A little more than $10 million of that has been raised so far from the sale of her assets; officials have said there is little hope the bulk of the money ever will be paid back.
Still, once she is released, Crundwell must turn over 10 percent of any income she earns for restitution, Reinhard ordered.

While the Federal Bureau of Prisons ultimately will decide where she will be imprisoned, as she requested, Reinhard will recommend a federal prison close to Beloit, Wis., where her longtime boyfriend, Jim McKillips, lives.

Crundwell, wearing a cream-colored sweater and jeweled hair clip, gave a tearful apology before Reinhard handed down her sentence.

“I’d just like to say I’m truly sorry to the city of Dixon, to my family and my friends,” Crundwell said as her attorneys handed her a tissue.

Reinhard said he could not overlook the fact that while the city found itself in dire financial straits, Crundwell sat silently by, lining her pockets with city funds.

“This has been a massive stealing of public money — monies entrusted to you as a public guardian of Dixon, Illinois,” Reinhard said.

“You showed much greater passion for the welfare of your horses than the people of Dixon you represented. You lived the lifestyle befitting a wealthy person, and you did this on monies that weren’t yours.”

Crundwell pleaded guilty in November and faced a maximum 20 years.

She started working for the city in 1970, when she was still in high school, and moved into the position of the city’s top financial office in 1983.

Crundwell’s scheme began in December 1990, when she opened up the Reserve Sewer Capital Development Account in the city’s name ... and hers, at First Bank South, now Fifth Third Bank.

Throughout the years, she transferred millions of dollars from the Capital Development Fund into the RSCDA and used the money to buy expensive homes, luxury vehicles, jewelry and a herd of prize-winning quarter horses that eventually numbered about 400 head.

“While the city was suffering, the defendant was living her dreams,” Assistant U.S. Attorney Joe Pedersen told the judge.

Crundwell’s federal defender, Paul Gaziano, argued for a shorter sentence.

She was “most cooperative” with prosecutors, FBI agents and U.S. Marshals as they investigated the case, and helped them identify and liquidate her assets “with the hope of making amends to the city of Dixon,” Gaziano said.

Pedersen countered that Crundwell already received consideration for her cooperation when prosecutors allowed her to plead guilty to only one count of wire fraud.

Further, Crundwell tried to minimize the extent of her crime at her initial FBI interview. She told two agents she opened up the secret account in 1999 or 2000, and that she believed she only took $10 million. She remembered the date, she told agents, because she needed money to buy the horse, Sheza Telusive Kid, FBI Special Agent Patrick Garry testified.

She bought the horse in April 2001, prosecutors said. Investigators also discovered that Crundwell had taken more than $25,000 from the Dixon Sister Cities account between May 1988 and April 1990.

Pedersen also argued that there was no evidence Crundwell ever intended to stop stealing from the city.

Several city officials testified about how the years of thievery devastated the city and caused the municipality to make serious cuts: Streets could not be fixed; the police radio system could not be upgraded; the cemetery went unmowed; and employee layoffs were imminent.

Mike Stichter, superintendent of streets, testified that he went to Crundwell to request funds to pave city streets and replace an old truck. She told him there was no money to spare.

Crundwell told Stichter, “Mickey, if you know where the money tree is at, I’ll be glad to give you a dump truck,” he testified.

Mayor Jim Burke testified Crundwell was “trusted, admired and well thought of by many” who worked for the city. She had a “ringside seat” to the devastation caused by her embezzlement, he said.

“She had the good life without conscience and regard for the taxpayers and her co-workers,” he testified. “Rita must pay the price.”

Crundwell’s legal problems are not over. She is charged in Lee County with 60 counts of theft for stealing more than $11 million from the city since January 2010. If convicted, that sentence will run concurrent to the federal sentence.
Her Lee County public defender, Bob Thompson, is considering filing a motion to dismiss that case, though, on the grounds that it may constitute double jeopardy.

And Lee County State’s Attorney Anna Sacco-Miller said after the hearing that she will meet with city officials to determine the “best course of action” with the state charges.

“The federal court took everything into account, not just the federal charge,” Sacco-Miller said. “(The judge) felt his sentence would serve justice for both state and federal systems.”

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