Comptroller, horse lady and crook, Part 1 of 2

ERIC FERGUSON/ISTOCKPHOTO

 As the comptroller for the small town of Dixon, Ill., since 1983, Rita Crundwell managed all financial aspects of the city funds, including transferring money between accounts, writing checks and authorizing payments. Her salary was $80,000 per year, but she enjoyed a lavish lifestyle and was a nationally known horse breeder. After a city clerk found a problem in the city's accounts, the mayor contacted the FBI. Six months later, agents arrested Crundwell. She has pleaded not guilty to misappropriating more than $53 million in city funds.

Rita Humphrey was 17 when she began working for the Dixon, Ill., city hall in 1970 as part of a work program for high school students. She was an honor roll student, a homecoming attendant and had participated in 4-H activities. After graduating, she had planned to attend a community college, but she stayed at city hall and became a clerk. In 1971, she won second place in a halter horse category at the county fair and her passion for equines grew. Her family once showed and bred horses, and she wanted to revive the family's name.  

On Oct. 12, 1974, Rita married Jerry Crundwell. The marriage lasted nearly 12 years, but she filed for divorce in April of 1986, citing mental abuse and alleging that the couple engaged in frequent arguments. A judge granted the divorce two months later. 

RITA THE COMPTROLLER

In 1983, Rita Crundwell became Dixon's comptroller when the previous comptroller retired. Walter Lohse, the city's finance commissioner and council member, recommended Rita for the position. She had told Lohse that she thought she'd be a good candidate because of her years of city hall experience. 

Dixon, a city of 15,000, 100 miles southwest of Chicago, had an annual budget of less than $9 million a year in 1983. Crundwell now managed the finance and accounting departments and supervised two clerks. In the next few years, the city endured several financial shortfalls, but Crundwell would always say they were caused because the state often owed the city funds. City officials believed her after each annual financial audit. Through the years, her knowledge of accounting and the maintenance of city accounts increased. She knew more about city financial matters than any of the council members. They trusted her and believed her explanations.

In December 1990, Rita opened an account at the Fifth Third Bank of Ohio in the name of the City of Dixon and RSCDA, c/o Rita Crundwell, known as the RSCDA account. The city normally maintained these accounts: corporate fund, sales tax fund, capital project fund, motor fuel fund, money market and capital development fund. 

Between December 1990 and April 2012, investigators say Crundwell used her position as comptroller to transfer funds from the Dixon's money market account to various other city bank accounts. Crundwell allegedly repeatedly transferred city funds into her RSCDA account and used the money to pay for her own personal and private business expenses, including horse-farming operations, personal credit card payments, real estate and vehicles. 

THE CREATION OF AN EMPIRE

Throughout the 1980s and early 1990s, Crundwell appeared to live modestly and within her salary. During the day, she often would travel back and forth between her job and her modest farm to help with chores. In 1978, Rita began showing quarter horses at the regional level. In 1985 she won both the Indiana State Quarter Horse Championship and the National Texas Classic State Hunter Under Saddle Championship. In 1989, Crundwell purchased three horses. 

In the late 1990s she moved onto the national level in the quarter-horse industry and began construction projects on her properties to develop her dream of building a first-class, horse-farming business.

She made massive changes on a 6.9-acre, single-family home property she inherited from her mother's death. In 1997, she built horse stables on the property, and in 2000 she completely overhauled the house. She more than doubled the living space to 3,484 square feet. She also added an in-ground pool. 

Crundwell then bought, in installments, the 87.8-acre RC Quarter Horses (later known as Rita's Ranch), in Dixon, from a family member, Richard A. Humphrey, for $540,000. She paid the first installment in 2002 and the second final installment in 2011.

In 2006, she built on the property a 19,584-sqaure-foot horse barn that included an arena, an office, stalls and storage space. 

Then in 2007, she bought another 43 acres. She removed the existing house on the property and built a new two-story house. Crundwell also bought 81 acres of farmland and a 7.5-acre ranch in Beloit, Wisc. 

 

Crundwell had built an empire for breeding and showing championship horses. She used her company, RC Quarter Horses LLC, to initiate and authorize her business transactions.