Rita Crundwell

Dixon Fraudster (Rita Crundwell)

Rita Crundwell served as the comptroller and treasurer of Dixon, IL from 1983 to 2012. She was fired in 2012 after finding out that she had embezzled $53.7 million from the city over a period of 22 years. Probable rationalization of her fraud is to support her championship American Quarter horse breeding operation. She was named the leading owner by the American Quarter Horse Association for eight consecutive years prior to her arrest. She has confessed her crimes and now sentenced to 20 years prison. During her service tenure, she acquired a sterling reputation for her honesty. How could a treasurer of an Illinois town with an annual budget of $6-$8 million steal over $50 million in 2 decades. The following is the toolkit for the Dixon fraud, as described by attorney Devon C. Bruce, who litigated the Dixon civil case

Motivation for the Fraud:

To start off with, Rita excelled in world horse championships and she owned over 400 horses. Rita's annual salary was $80000, which is pretty less to maintain such huge number of horses and to keep up the record of championship. While on the other hand, Rita was wealthy, and she lived a luxurious life. The residents of Illinois and her colleagues including the major were in the presumption that all her wealth came from the championships that she won on her horses. So there was no scope of doubt with respect to such a massive fraud. Infact residents of Dixon were more impressed with her because she had been managing her day job as city comptroller while breeding horses for championships simultaneously.

Factors that created the opportunity:

Rita was holding both the comptroller and the treasurer of Dixon and so she had a lot of internal information and this can create a lot of opportunity for fraud. This also shows that there is a lack of segregation of duties and poor internal control.

Another factor could be the excessive trust in her. Rita is a resident of Dixon and she was a trusted and loyal employee from the Mayor to the residents of Illinois. No one should be trusted so blindly.

Illinois state's frequent budget shortfalls can also be a possible opportunity in this case. Rita covered up her embezzlement by blaming the state being late in paying the city, its share of revenue tax income.

Rationalization for the Fraud: 

Rita had to do a lot of work both as comptroller and treasurer of Dixon. So a possible rationalization could be that she deserved more pay over $80000 annually.

Rita is divorced and had to maintain over 400 horses. The salary that she got as a comptroller, for sure, cannot be sufficient to breed the horses for championship. She had been working for over 2 decades for the Dixon city, she deserved some perks.

What could have been done to prevent this Fraud: 

Segregation of duties. Duties have to be clearly separated for each person, this can also help create employment.

...