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Rita Crundwell: Dixon, Illinois Comptroller Pleads Not Guilty To Stealing $53 Million

By ROBERT RAY 05/07/12 02:43 PM ET AP

ROCKFORD, Ill. -- 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. Crundwell, who is free on a recognizance bond, could be sentenced to up to 20 years in prison if convicted.

Prosecutors allege that since 1990, the 58-year-old Crundwell stole more than $53 million from Dixon, where oversaw 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 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 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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  • Small Town Swindle

    Rita Crundwell, former comptroller for Dixon, Ill., leaves federal court in Rockford, Ill., Monday, May 7, 2012, after pleading not guilty at her arraignment to charges that accuse her of stealing tens of millions of dollars from the community. Prosecutors contend that Crundwell had been transferring Dixon's money to a secret account since at 1990 and using the money to create one of the nation's leading horse-breeding operations and buy luxury homes, cars and jewelry. (AP Photo/Robert Ray)

  • Small Town Swindle

    Rita Crundwell, former comptroller for Dixon, Ill., leaves federal court in Rockford, Ill., Monday, May 7, 2012, after pleading not guilty at her arraignment to charges that accuse her of stealing tens of millions of dollars from the community. Prosecutors contend that Crundwell had been transferring Dixon's money to a secret account since at 1990 and using the money to create one of the nation's leading horse-breeding operations and buy luxury homes, cars and jewelry. (AP Photo/Robert Ray)

  • Small Town Swindle

    FILE - This November 2011 file photo, provided by The American Quarter Horse Journal shows Rita Crundwell, of Dixon, Ill., posing with her horse, Pizzazzy Lady, at the 2011 American Quarter Horse Association World Championship Show in Oklahoma City. Crundwell, the Dixon comptroller, was arrested April 17, 2012 by the FBI and accused of siphoning off a staggering $30 million in funds from the city of Dixon to support her ranches. (AP Photo/Courtesy of The American Quarter Horse Journal)

  • Small Town Swindle

    FILE - In this April 20, 2012, photo, horses graze at Rita Crundwell's horse ranch outside of Dixon, Ill. Crundwell is accused of stealing $53 million from the small city in northern Illinois by siphoning public funds into a secret bank account opened in 1990 while she was Dixon's comptroller. A judge on Thursday, May 3, 2012, granted the government's request for forfeiture of the 311 animals owned by Crundwell, which are now in the care of U.S. marshals. Federal prosecutors contend she used the funds to sustain a lavish lifestyle and her horse breeding operation. Crundwell was regarded as one of the best horse breeders in the country. (AP Photo/Charles Rex Arbogast, File)

  • Small Town Swindle

    This April 20, 2012 photo shows the horse ranch owned by Rita Crundwell outside of Dixon, Ill. Crundwell was recently fired from her Dixon comptroller job after her arrest by FBI agents on a charge of wire fraud. Crundwell lived two lives, as a small town city employee and a world champion horse breeder. Prosecutors say they've obtained bank records that document each step Crundwell took in shifting taxes and other city funds from account to account before finally hiding them in a secret account, as well as the checks and online payments made from it. (AP Photo/Charles Rex Arbogast)

  • Small Town Swindle

    This April 20, 2012, shows the entrance to the horse ranch owned by Rita Crundwell outside of Dixon, Ill. Crundwell was recently fired from her Dixon comptroller job after her arrest by FBI agents on a charge of wire fraud. Crundwell lived two lives, as a small town city employee and a world champion horse breeder. Prosecutors say they've obtained bank records that document each step Crundwell took in shifting taxes and other city funds from account to account before finally hiding them in a secret account, as well as the checks and online payments made from it. (AP Photo/Charles Rex Arbogast)

  • Small Town Swindle

    Rita Crundwell, former comptroller for Dixon, Ill., leaves federal court in Rockford, Ill., Monday, May 7, 2012, with her attorney Paul Gaziano, after pleading not guilty at her arraignment to charges that accuse her of stealing tens of millions of dollars from the community. Prosecutors contend that Crundwell had been transferring Dixon's money to a secret account since at 1990 and using the money to create one of the nation's leading horse-breeding operations and buy luxury homes, cars and jewelry. (AP Photo/Robert Ray)

  • Small Town Swindle

    Rita Crundwell, center, former comptroller for Dixon, Ill., arrives at federal court in Rockford, Ill., Monday, May 7, 2012, with attorneys, Paul Gaziano, left, and Kristin Carpenter, for her arraignment to face charges that accuse her of stealing tens of millions of dollars from the community. A federal grand jury last month returned an indictment charging Crundwell with wire fraud for allegedly siphoning more than $53 million from Dixon since 1990 into a secret account. (AP Photo/Robert Ray)

  • Small Town Swindle

    In this April 20, 2012, photo, Dixon Mayor James Burke stands in city council chambers where a portrait of President Ronald Reagan, Dixon's most famous native hangs, in Dixon, Ill. Recently the city fired comptroller Rita Crundwell, who was arrested by FBI agents on a charge of wire fraud. Crundwell lived two lives, as a small town city employee and a world champion horse breeder. Prosecutors say they've obtained bank records that document each step Crundwell took in shifting taxes and other city funds from account to account before finally hiding them in a secret account, as well as the checks and online payments made from it. (AP Photo/Charles Rex Arbogast)

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Filed by Joseph Erbentraut  |