Dixon City Embezzlement

Q#1 – How the Fraud was Perpetrated

Major accounting frauds are a common spectacle in the modern world. Every time the people of this nation are outraged and shake their heads in disgust. You hear of unscrupulous CEOs like Jeffery Skilling who cheat away millions, sometimes billions of dollars. The most common theme of these major thieveries is that the culprit is a big-time corporate executive in a big economic environment. However, our preconceptions of these cases of accounting fraud have proven to be too narrow by Rita Crundwell and the $53 million she embezzled from the small town of Dixon, Illinois.

In the middle of April in the year 2012, federal investigators spent the morning in the city of Dixon arresting Rita Crundwell for embezzling $53 million. It is estimated she stole about $30 million since 2006 and that she stole around $23 million between 1990 through 2006 (Verschoor). The case is notable in that not only is this the biggest case of the embezzlement of a municipality, but this also makes Rita Crundwell the fifth largest embezzler ever in the United States (Smith).

No one suspected Rita Crundwell of being capable of such acts. She was well regarded in the community, both as a public servant and a horse breeding and showing business. According to Verschoor, “Crundwell gained national prominence as a horse breeder; she bred 52 world champion horses.” She certainly did not fit the profile of a crooked public servant that could make off with millions of dollars.

It is notable that Rita Crundwell has only a high school diploma to her name. She never obtained any accounting education from a college. She started working for the city during high school and naturally transitioned into an employee of city hall when she graduated high school. She was made comptroller in 1983 and was said to have immediately gotten a handle on the position. By 1990, she essentially controlled every aspect of Dixon’s finances.

Crundwell had the complete...