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Auction of Horses From Indicted City Comptroller Earns Almost $5 Million

Dixon, Ill., Comptroller Rita Crundwell is shown in this undated photo. (American Quarter Horse Association)(DIXON, Ill.) -- An auction of horses that belonged to an Illinois city comptroller indicted for stealing more than $53 million yielded $4.8 million this week, with millions in seized assets that have not been liquidated, says the U.S. Marshals Service.

Rita Crundwell, 59, comptroller of Dixon, Ill., is accused of fraudulently obtaining more than $53 million in city funds to support a "lavish lifestyle," including a large farm with over 150 horses, over $339,000 in jewelry, and numerous vehicles.

Crundwell was arrested in April and indicted in May by the U.S. Attorney's Office for one count of wire fraud after allegedly helping herself to public funds since 1990.

At the time of her arrest, FBI agents used seizure warrants at Crundwell's home, office, and her champion horse farm in Beloit, Wis., as well as another farm in Dixon, and seized contents of two bank accounts she controlled.

As the town's comptroller since the early 1980s, Crundwell earned an annual salary of $80,000, according to the complaint filed in April in the Northern District Court of Illinois.

Her attorney, Paul Gaziano of the Federal Defender Program, did not immediately return a request for comment.

The U.S. District Court Judge of Rockford, Ill., had ordered the U.S. Marshals Service to seize, manage and liquidate Crundwell's assets and to deposit the funds into an escrow account. The U.S. Marshals will use some of the funds for their expenses, including $1.5 million from caring for the horses. Other expenses include $400,000 that Crundwell still owed on a luxury motor home, the Chicago Tribune reported.

The funds are expected to be available to the city provided the government proves the allegations against Crundwell.

There have been three auctions this month that earned $7.2 million and Jason Wojdylo, chief inspector of the U.S. Marshals Service asset forfeiture division, expects millions in assets have yet to be sold.

The most expensive horse from the live auction, a three-time quarter-horse world champion called "Good I Will Be," sold to a Canadian for $775,000. Also sold during the live auction were frozen horse semen for $98,500 and tack and equipment for $892,945. Earlier this month, an online auction sold 80 horses for $1.6 million. On Tuesday, Crundwell's luxury motor home sold for $800,000.

Tim Jennings, co-owner of Professional Auction Services Inc., which managed the live auction of 319 horses on Sunday and Monday, said Crundwell would have probably never let go of many of the horses sold.

"These bloodlines will be dispersed in the industry and will have an impact for quite some time," he said.

Jennings said he was surprised by the show of interest in the auction from around the world, from people in Australia, Brazil, Europe. Part of the attention was driven by Crundwell's horses, which have made her "tremendously successful" in the quarter-horse world. She is an eight-time leading exhibitor at the American Quarter Horse world championship show.

However, Jennings said the allegations against Crundwell brought a large number of the 4,000 auction attendees.

Now that the most expensive assets to manage, the horses, have been sold, the Wojdylo said the U.S. Marshals Service can focus on the other assets, which include jewelry, vehicles and land. Wojdylo said one of her farms, which spans 80 acres, may be worth $800,000 alone.

Dixon has a population of 15,733, according to the U.S. Attorneys Office, and a budget of $8 million to $9 million a year. Crundwell, who handled all finances for the city, allegedly had access to an account that was unknown to Dixon's Mayor James Burke.

Burke said a new comptroller has been hired by the city and Crundwell is undergoing due process from both the federal and state court system. Last week, a Lee County grand jury returned a 60-count indictment against Crundwell on state charges that she embezzled almost $11 million in city money since January 2010.

Crundwell is accused of moving funds from the city's various bank accounts through a series of wire transfers and checks payable to "Treasurer," and depositing them into the unknown account from which she withdrew money for her own personal and business expenses.

The unknown account was held by the City of Dixon, but an entity called "RSCDA," was also listed. Checks written from this account were in 'C/O Rita Crundwell,'" the U.S. Attorney's office said.

Between January of 2007 and March of 2012, Crundwell allegedly used city funds to spend more than $2.5 million on her personal American Express credit card account, including more than $339,000 on jewelry, spending an average of over $5,380 a month.

Copyright 2012 ABC News Radio

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