Small-town Ill. official pleads not guilty to stealing $53 million

ROCKFORD, Ill. (AP) — The former comptroller of a small northern Illinois city pleaded not guilty Monday to charges alleging she stole more than $53 million of the public’s money to fund a lavish lifestyle and create one of the nation’s foremost horse-breeding operations.

Rita Crundwell and her attorney, Paul Gaziano, refused to comment after leaving the federal courthouse in Rockford, where she pleaded not guilty to a single count of wire fraud. Ms. Crundwell, who is free on a recognizance bond, could be sentenced to up to 20 years in prison if convicted.

Prosecutors allege that, beginning in 1990, the 58-year-old Ms. Crundwell stole more than $53 million from Dixon, where she had overseen public finances as the city comptroller since the 1980s, by diverting it to an account she had set up for personal use and misleading city officials.

Authorities say Ms. Crundwell bought luxury homes and vehicles and spent millions on her horse-breeding operation, RC Quarter Horses LLC, which produced 52 world champions in exhibitions run by the American Quarter Horse Association.

Prosecutors say her scheme unraveled only when a co-worker filling in for Ms. Crundwell while she was on an extended vacation stumbled upon the secret bank account.

Her arrest stunned tiny Dixon, a small city along a picturesque vein of the Mississippi River about a two-hour drive west of Chicago in Illinois farm country. Its 16,000 people are largely lower middle class, working at factories, grain farms, the local prison and a hospital, among other places.

Prosecutors also have filed a lawsuit seeking 311 registered quarter horses and dozens of foals that are expected to be born this spring. Prosecutors said while announcing the lawsuit that they plan to have the horses sold and to give the proceeds to Dixon, where the late President Ronald Reagan lived as a boy.

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