Ex-Dixon comptroller appealing sentence for looting city coffers

Attorney says judge failed to credit Rita Crundwell's cooperation with FBI after arrest

July 11, 2013|By Melissa Jenco, Chicago Tribune reporter
  • Attorneys for former Dixon comptroller Rita Crundwell have requested that her nearly 20-year sentence be thrown out and a new hearing be held.
Attorneys for former Dixon comptroller Rita Crundwell have requested that her nearly 20-year sentence be thrown out and a new hearing be held. (John J. Kim, Chicago Tribune)

Disgraced former Dixon comptroller Rita Crundwell is challenging her nearly 20-year federal prison sentence for stealing almost $54 million from the small northwestern Illinois town.

In a legal brief filed Wednesday with the 7th Circuit U.S. Court of Appeals in Chicago, Crundwell's attorney argued that a federal judge in Rockford erred in imposing the stiff sentence by not giving her credit for her extensive cooperation after her arrest.

Paul Gaziano, the federal defender representing Crundwell, said U.S. District Judge Philip Reinhard improperly tacked four years onto the sentence above what was called for by federal sentencing guidelines. He asked that the sentence be thrown out and a new hearing held.

Crundwell, 60, was sentenced in February to 19 years and seven months in federal prison after pleading guilty to a single count of wire fraud and admitting to money laundering. For more than two decades, the longtime comptroller looted the city's coffers in what authorities have called the largest municipal fraud in U.S. history.

In the new court filing, Gaziano said that Crundwell admitted wrongdoing when first confronted by the FBI at City Hall in April 2012. Over the next 10 months, she met regularly with law enforcement and helped with the sale of the extensive assets she acquired through her 22-year scheme.

Yet the defense brief said the judge mentioned the cooperation only in passing at her sentencing hearing and failed to credit Crundwell in the sentence for accepting responsibility.

The filing also faulted the judge for sentencing Crundwell to four years above the maximum called for under the federal guidelines after finding Dixon residents suffered psychological or emotional harm from her massive fraud.

Gaziano maintained the finding was misplaced and said the city was the victim, not its residents.

But in a telephone interview Wednesday, Dixon Mayor Jim Burke scoffed at the argument that Crundwell's theft did not psychologically harm Dixon residents and said he hopes the former comptroller's sentence is not reduced.

"The city doesn't have a say in it, but we would be opposing it 100 percent," he said.

Prosecutors have until Aug. 9 to file their response with the appeals court.

Crundwell, who used the stolen money to fund a lavish lifestyle and horse-breeding operation, is being held at a federal prison in Minnesota.

Since last spring, the U.S. Marshals Service has been selling off her assets, including about 400 horses, a ranch in Dixon, multiple homes, a luxury motor home, dozens of vehicles and hundreds of thousands of dollars in jewelry.

The auctions have raised about $12.2 million. After the government takes its cut for caring for the horses for months and other debts are paid off, about $9.2 million could be returned to Dixon, Jason Wojdylo, chief inspector for the Marshals Service, said Wednesday.