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Quarter horse owner gets 19 1/2 years for embezzling in Illinois

February 14, 2013|By Matt Pearce | This post has been updated. See below for details.
  • Rita Crundwell, the former comptroller in Dixon, Ill., was sentenced to almost 20 years in prison in federal court Thursday.
Rita Crundwell, the former comptroller in Dixon, Ill., was sentenced to… (Alex T. Paschal / Sauk Valley…)

Do not pass go, do not collect $53 million: Former queen of the quarter horse world Rita Crundwell was headed straight to jail after her sentencing in federal court in Illinois on Thursday.

Crundwell, 60, received 19 years and seven months in prison, completing her fall from grace as a high-rolling champion horse owner who funded her lavish lifestyle by using her job as the Dixon, Ill., comptroller, steering tens of millions of dollars from the city into her breeding operations.

Crundwell's reign as a quarter horse champion was almost unprecedented, with eight straight titles as top owner at the American Quarter Horse Assn.'s annual World Show in Oklahoma City. She was so dominant that she was often known simply as Rita among competitors, who sometimes ducked away from competitions if word got around that Crundwell's horses were participating.

Also near-unprecedented, at least in the modern era: the extent of Crundwell's municipal embezzlements, which far exceeded the $5.5 million prosecutors suspect eight city leaders of stealing from Bell, Calif.

Crundwell, who grew up from humble beginnings, had a salary of $80,000 a year managing Dixon's annual budget, which usually ran less than $10 million. She'd had the job for decades -- she first started working for the town in high school -- and Dixon's form of government offered little oversight of her unelected role.

She was cheerful and kind, colleagues recalled, yet opaque; they'd thought she'd grown wealthier because of her horse championships, and she did little to dispel that notion. Meanwhile, in the horse world, competitors speculated wildly about where her money came from, acutely aware of the old adage that the best way to make a small fortune in horses is to start with a big fortune.

"I do have mixed reactions," said Cathy James, manager of Dixon's municipal wind band, which had suffered as the city faced a financial crisis and Crundwell continued to pipe money out of its coffers. "I hate to see anybody go to prison. But she inflicted a lot of hardship on a lot of people that was unnecessary."

"When I look back at all the years she was living the high life … while there were people who had their jobs cut back, or lost their jobs, or were struggling because of the taxes and stuff -- I guess if the court of law gave her 19 years, she deserves 19 years," James said.

U.S. District Judge Philip G. Reinhard, during the sentencing in Rockford, Ill., said Crundwell had "greater passion for the welfare of her horses than the people of Dixon who she represented," according to a news release from the U.S. Attorney's office in Illinois.

Assistant U.S. Atty. Joseph Pedersen told the judge, "While the city was suffering, the defendant was living her dreams."

The city's millions vanished into Crundwell's horses, and when federal officials seized and auctioned off her assets -- which included hundreds of horses, multiple homes, new trucks and trailers -- Dixon was only able to recoup a few million of its lost assets. The big fortune had become a small one.

And Crundwell found herself too poor to afford her own attorney. Her federal public defender, Paul Gaziano, declined to comment on the sentencing, which was nearly the maximum of 20 years requested by prosecutors.

“[Crundwell's sentence] is probably about right in proportion to what I’ve seen on other cases of lesser magnitude," said Chris Marquet, chief executive of Marquet International, a Boston-based security consulting firm, who previously identified Crundwell's municipal embezzlement as one of the largest in modern American history.

"It’s not exactly a death sentence," Marquet added, "but she’ll be fairly senior when it’s over.”

[Updated, 4:31 p.m. Feb. 14: Dixon Mayor James Burke gave a statement to the court at Crundwell’s sentencing, describing the roads she drove over that couldn’t be fixed, the equipment the city couldn’t afford to replace, at one point quoting Shakespeare: “A horse! A horse! My kingdom for a horse!”

The city was not vindictive against Crundwell, he told the court, but it was certainly interested in seeing her serve her full sentence for the crimes she’d committed.

“I have never experienced an emotion in my life like I did today,” Burke recalled later Thursday evening, after Crundwell was led away.

“I felt elated to see her being taken out of the courtroom with handcuffs on, but at the same time, I felt sad,” Burke said. “It was the only time in my life I felt the emotion of feeling happy and sad at the same time, because I’ve known her for many years, and what a tragedy the whole thing is. She’s going to be pushing 80 years old when she gets out of prison. But the people in Dixon wanted her to get the maximum sentence, absolutely they did.”]

matt.pearce@latimes.com

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