Editor's note: This article makes a reasonable Shark wonder why Mrs. Crundwell is the only person in prison. 22 years of embezzlement and no one noticed? Come on! This sounds like what goes on in the Probate Court of Cook County. Lucius Verenus, Schoolmaster, ProbateSharks.com
Dixon agrees to $40 million settlement in embezzlement case
Lawsuit claimed auditors, bank failed to catch treasurer's theft of nearly $54 million
Former Dixon comptroller Rita Crundwell embezzled nearly $54 million from the city over 22 years. (John J. Kim, Chicago Tribune / October 31, 2012)
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The city of Dixon has settled a lawsuit for $40 million against the auditors and bank that did not catch its treasurer's massive embezzlement that went on for more than two decades, officials said Wednesday.
The settlement was reached after a 17-hour negotiation in Chicago that went into the early morning hours Saturday.
Dixon Mayor Jim Burke said the city will owe $10 million to its attorneys, but he expects nearly that much will be returned to the city from the sale of assets of disgraced former treasurer Rita Crundwell.
The mayor plans to hold a public meeting next week to discuss how Dixon will use the settlement money.
"I think the city is going to be very solvent after this," Burke said.
At Crundwell's sentencing in February, several Dixon city officials testified how Crundwell's theft of nearly $54 million over 22 years crippled the small northwestern Illinois community, delaying projects like repaving streets and replacing police radios, and leading to fears of layoffs.
Crundwell, 60, who used the money to fund a lavish lifestyle and a horse-breeding operation, is serving a sentence of nearly 20 years in prison after pleading guilty to a single count of wire fraud and admitting to money laundering. She is appealing the sentence.
The settlement of the Lee County lawsuit calls for payments of $35.15 million from accounting firm CliftonLarsonAllen, $3.85 million from Fifth Third Bank and $1 million from the accounting firm of Janis Card Associates and owner Samuel Card.
CliftonLarsonAllen, which has offices around the country, has been doing financial work for Dixon since 1988, while the Card firm, in Sterling, had performed audit work for the city since 2006.
Attorney Devon Bruce, who represented Dixon in the lawsuit, said employees at Clifton "negligently failed to identify Rita Crundwell's theft for over 20 years." He called the settlement "a complete win for the city of Dixon."
An attorney for Janis Card Associates declined comment, but CliftonLarsonAllen's CEO issued a statement saying the firm believed "there was a shared responsibility that resulted in Ms. Crundwell's fraud continuing undetected."
"The right thing to do is reduce the harm experienced by the taxpayers of Dixon and put this matter behind us," CEO Gordon Viere said.
Andrew Hayes, vice president of public relations for Fifth Third Bank, said the institution where the city kept its bank accounts has "agreed to the settlement without any admission of liability."
mjenco@tribune.com
The settlement was reached after a 17-hour negotiation in Chicago that went into the early morning hours Saturday.
Dixon Mayor Jim Burke said the city will owe $10 million to its attorneys, but he expects nearly that much will be returned to the city from the sale of assets of disgraced former treasurer Rita Crundwell.
The mayor plans to hold a public meeting next week to discuss how Dixon will use the settlement money.
"I think the city is going to be very solvent after this," Burke said.
At Crundwell's sentencing in February, several Dixon city officials testified how Crundwell's theft of nearly $54 million over 22 years crippled the small northwestern Illinois community, delaying projects like repaving streets and replacing police radios, and leading to fears of layoffs.
Crundwell, 60, who used the money to fund a lavish lifestyle and a horse-breeding operation, is serving a sentence of nearly 20 years in prison after pleading guilty to a single count of wire fraud and admitting to money laundering. She is appealing the sentence.
The settlement of the Lee County lawsuit calls for payments of $35.15 million from accounting firm CliftonLarsonAllen, $3.85 million from Fifth Third Bank and $1 million from the accounting firm of Janis Card Associates and owner Samuel Card.
CliftonLarsonAllen, which has offices around the country, has been doing financial work for Dixon since 1988, while the Card firm, in Sterling, had performed audit work for the city since 2006.
Attorney Devon Bruce, who represented Dixon in the lawsuit, said employees at Clifton "negligently failed to identify Rita Crundwell's theft for over 20 years." He called the settlement "a complete win for the city of Dixon."
An attorney for Janis Card Associates declined comment, but CliftonLarsonAllen's CEO issued a statement saying the firm believed "there was a shared responsibility that resulted in Ms. Crundwell's fraud continuing undetected."
"The right thing to do is reduce the harm experienced by the taxpayers of Dixon and put this matter behind us," CEO Gordon Viere said.
Andrew Hayes, vice president of public relations for Fifth Third Bank, said the institution where the city kept its bank accounts has "agreed to the settlement without any admission of liability."
mjenco@tribune.com
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