Crundwell Sentenced to Nearly 20 Years in Embezzlement Case

Former high-profile Quarter Horse breeder Rita Crundwell will serve nearly 20 years in federal prison for embezzling $53 million from the coffers of Dixon, Ill.

In April 2012, a federal grand jury in Illinois indicted Crundwell for allegedly misappropriating $53 million in funds from the city of Dixon, Ill., where she had served as comptroller since the 1980s. Federal law enforcement agents later arrested Crundwell and charged her with one count of wire fraud.

A federal court judge later placed more than 400 horses forfeited by Crundwell in connection with the case in the custody of the U. S. Marshals Service. The horses, along with stallion semen, equestrian trailers and other equipment, a luxury motor home, real estate, and furnishings, were later sold during online and live auctions.

Crundwell initially pleaded not guilty to the wire fraud charge. However on Nov. 14, 2012, Crundwell appeared in U.S. District Court in Rockford, Ill., and changed her plea to guilty under a plea agreement. Under the agreement, Crundwell admitted to stealing more than $53 million from the city of Dixon, Ill., and using it to finance her Quarter Horse breeding business, horse show appearances, and other equestrian activities. Under the deal, she also admitted that she engaged in illegal money laundering in connection with the embezzlement. Also under terms of the deal, Crundwell agreed that she owes restitution to the city of Dixon totaling $53,740,394, minus any credit for funds repaid prior to sentencing. She also agreed to the entry of a forfeiture judgment in the same amount,

Randall Samborn, spokesman for the U.S. Attorney's Office in Illinois said that on Feb. 14, Crundwell appeared in federal court where U.S. District Judge Philip G. Reinhard sentenced her to serve 19 years and 7 months in federal prison.

In handing down the sentence, Reinhard said Crundwell showed greater concern for her horses than for the people of Dixon.

"This has been a massive stealing of public money--monies entrusted to you (Crundwell) as a public guardian of Dixon, Ill.," Reinhard said.

Crundwell's attorney Paul Graziano, assistant defender for the Federal Defender Program declined comment on the sentencing.

Dixon Mayor James Burke said is feelings during the sentencing were mixed.

"I felt happy and sad all at the same time," Burke said. "I've never had those feelings together before."

In a statement to the court, Burke said that a dishonest mindset was not part of the Dixon town government.

"The seed of dishonesty was planted, nurtured, and brought to full bloom by Rita," Burke said. "She was the sole cause of 'Crudwell' and 'crime' becoming synonymous."

In addition to handing down the sentence, Reinhard ordered restitution to the city of Dixon contained in the plea deal in the amount of $53,740,394, and imposed an agreed forfeiture judgment in the same amount.

So far, the U.S. Marshall's Service has recovered more than $12.38 million from sales of Crundwell's forfeited assets via the online and live auctions. The sales of real estate in Illinois and Florida remain pending. The nearly $9.5 million in net proceeds from the forfeited property are being held in escrow pending further proceedings on restitution to the city of Dixon, Samborn said. Under federal law, the government can continue to seek additional assets of a defendant and obtain restitution for up to 20 years after a defendant is released from prison, Samborn said.

Following the court proceedings, Crundwell was taken into custody to immediately begin serving her sentence, Samborn said. Crundwell must serve at least 85% of her 235-month sentence and there is no parole in the federal prison system, he said.

About the Author

Pat Raia

Pat Raia is a veteran journalist who enjoys covering equine welfare, industry, and news. In her spare time, she enjoys riding her Tennessee Walking Horse, Sonny.

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