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Dixon City Council OKs settlement with auditors

Published: Tuesday, Oct. 15, 2013 10:57 p.m. CDT • Updated: Tuesday, Oct. 15, 2013 11:02 p.m. CDT
(AP file photo)
Former Dixoncomptroller Rita Crundwell leaves a courtroom Oct. 22, 2012, in Dixon with her attorney Paul Gaziano (left) after making her first appearance to face charges she embezzled nearly $54 million from the town of Dixon. Crundwell pleaded guilty to wire fraud and was sentenced in February to nearly 20 years in prison. On Wednesday, Dixon Mayor Jim Burke said the town will recoup about $40 million as part of a settlement with a bank and auditor it had accused of not doing enough to expose Crundwell's scheme.

DIXON – Officials of Dixon approved a $40 million settlement late Tuesday with auditors and a bank in the case of former Comptroller Rita Crundwell's theft of nearly $54 million in city funds.

Mayor Jim Burke signed several copies of a document finalizing the settlement with city auditors CliftonLarsonAllen and Janis Card and Associates, as well as Fifth Third Bank, according to the Dixon Telegraph newspaper.

"This is an iron-clad agreement," Burke said.

Of the $40 million, $35.15 million will be paid by CliftonLarsonAllen. Fifth Third Bank, which handled the city's checking accounts, will pay $3.5 million. Janis Card and Associates of Sterling, which took over the city's audits in 2005 until Crundwell's arrest, will pay $1 million.

As part of the agreement, the city will file no further lawsuits against the defendants or their representatives.

According to the settlement approved by the Dixon City Council, payments are expected to be made in full to the city by Dec. 1. Dixon will pay $10.35 million in legal fees.

City Council members didn't talk about how the settlement money will be budgeted. That discussion is expected to take place during the city's strategic planning sessions, once an administrator is hired.

Crundwell's thievery ranks as one of the worst abuses of public trust in the state's corruption-rich history. The money went toward everything from expensive horse trailers, luxury homes and cars to jewelry and birthday bashes in Venice Beach, Fla. She also spent millions on a quarter horse-breeding operation that produced 52 world champions in exhibitions run by the American Quarter Horse Association.

Because Crundwell had sole control of the city's bookkeeping, the theft went unnoticed for years.

Prosecutors say Crundwell began depositing Dixon's money in a secret bank account in January 1991 and continued doing so until her arrest in April 2012, months after the FBI began monitoring her transactions. Her scheme began to unravel when she went on an extended vacation in 2011 and the person filling in for her stumbled upon her secret account, prompting the mayor to call the FBI.

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