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November 24, 2014

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City bookkeeper who stole $53 million gets nearly 20 years

ROCKFORD, Ill. — A former city bookkeeper was sentenced to nearly 20 years in prison Thursday for embezzling more than $53 million from her small Illinois community, in what ranks as one of the worst abuses of public trust in the state's corruption-rich history.

Rita Crundwell, who pleaded guilty to wire fraud for embezzling money from the city of Dixon from 1991 until her arrest last April, tearfully apologized in a Rockford federal courtroom before U.S. District Judge Philip Reinhard sentenced her to close to the maximum 20 years. She was sentenced to 235 months, or slightly more than 19½ years.

For more than two decades as the comptroller for Dixon, a northern Illinois city best known for being the site of Ronald Reagan's boyhood home, Crundwell stole the public's money to live lavishly and build what became a nationally renowned horse-breeding operation.

Before she addressed the court Thursday, Crundwell listened to people testify about the damage she had done. She was taken into custody at the end of the hearing.

Crundwell still faces 60 separate but related state felony charges for theft in Lee County. She has pleaded not guilty to those charges.

Crundwell had sole control of the city's finances for years, enabling her to siphon city funds into a secret bank account and to hide her scheme by producing fictitious invoices for things such as municipal sewer projects. All the while, the money was going toward her prize-winning horses, expensive jewelry, luxury cars and birthday bashes in Florida.

Prosecutors say Crundwell began stealing Dixon's money in January 1991 and continued doing so right up until her arrest in April 2012. Authorities began investigating Crundwell in 2011 after she went on an extended vacation and a city employee filling in for her became suspicious. The mayor notified the FBI, which was able to monitor Crundwell as she continued stealing city funds for months.

The wire fraud count carried a maximum sentence of up to 20 years in prison and a fine of up to $250,000. Crundwell's public defender requested leniency, arguing for a punishment at the lower end of the sentencing guidelines, or around 13 years, while prosecutors sought a sentence closer to the maximum.

Crundwell's plea agreement also requires her to pay full restitution. Over the past several months, U.S. Marshals have been auctioning off Crundwell's fortunes, including houses, horses and jewelry, to raise restitution funds.

Crundwell had worked for the city about 100 miles west of Chicago since she was 17 and started to oversee public finances in the 1980s. The town's residents are largely lower-middle class, working at factories and grain farms. Prosecutors say residents came to trust her with the town's finances, but she began stealing money in 1990 to support her extravagant way of life.

Authorities say Crundwell bought luxury homes and vehicles and spent millions on her horse-breeding operation, RC Quarter Horses LLC, which produced 52 world champions in exhibitions run by the American Quarter Horse Association.

Her scheme unraveled when a co-worker filling in during Crundwell's vacation stumbled upon her secret bank account, prosecutors said.

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