Comptroller, Horse Lady, and Crook

Rita Crundwell was the comptroller for the town of Dixon, III from 1983 until 2012. During this period, Crundwell embezzled $54 million by fraudulently transferring the money between accounts, writing checks and authorizing illegal payments that benefited her horse breeding farm (Smith et.al., 2012). On April 18th, 2012, Crundwell had pleaded not guilty, but, later on, November 12th, 2012 she pleaded guilty of the crime. The District Judge Philip Reinhard sentenced Rita Crundwell for 19 years (235 months) after she pleaded guilty (Pavlo, 2016).

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The mayor and the other members of the city of Dixon, III trusted Crundwell too much to that she managed to take the advantage of their trust to embezzle such huge amounts ($54 million) for such a long time without anyones realization (Keyser, 2016). Reluctance to strictly following the internal controls was the major contributor of the fraudulent. The mayor and the council members failed to conduct the evaluation of performance based on the effectiveness of the workers, but instead considered their friendship and trust they had on Crundwell thus she took that opportunity to misuse the public funds for her interests.

In this case of fraudulent of $54 million by Crundwell, the major victims are more than 16, 000 the people the town of Dixon, III (Pope, 2016). The people have not been receiving quality services as they should since the community funds have been used personal interests. Also, the mayor is the victim because people accuse him of neglecting his work and requests for his resignation.

Following the fraudulent activities that took place for quite a long time, the town of Dixon, III must have suffered greatly in terms of development. As such, the accounting rule of segregation of duties and internal controls need to be implemented so that one person should not have authority over all aspects of finance. Separation of duties will ensure that one person will not have authority to independently all the transaction as was the case with Crundwell. Since during all the time that Crundwell was the comptroller the town of Dixon, III never presented the discussion and analysis as required by the US. GAAP (Generally Accepted Accounting Principles) and GASB (Government Accounting Standard Board), the management that took over need to ensure discussion and analysis are submitted to the external auditor without delays to avoid such a fraudulent in the future (Wells, 2014).

After Crundwell had pleaded guilty on November 14th, 2012, the District Court under the leadership of Judge Philip Reinhard sentenced her to 19 years. The court also made other significant decisions that may help in recovering some of the stolen money if not all the money. Among the decisions arrived at are the forfeiture of two residences and the horse farm in Dixon. Also, all the properties that are alleged to have been purchased using the fraud proceeds such as trucks, $2.1 million luxury motor home, a 2007 H2 Hummer, a home in Eaglewood, a pontoon boat, a 2005 Ford Thunderbird convertible and a 1967 Chevrolet Corvette roadster were subjected to forfeiture (Pavlo, 2016). Besides freezing the amounts in the Crundwells bank accounts, the federal judge in Rockford, III requested the selling of 400 quarter horses belonging to Crundwell to recover and return the embezzled funds to the people of the town of Dixon, III.

References

Genter, K. (2012). The horses take a nasty fall, Part 2 of 2. Fraud-magazine.com. Retrieved 12 March 2016, from http://www.fraud-magazine.com/article.aspx?id=4294975467

KEYSER, J. (2016). Small Town Swindle Suspect Allegedly Spent Stolen Millions On Horses. The Huffington Post. Retrieved 12 March 2016, from http://www.huffingtonpost.com/2012/04/27/rita-crundwell-dixon-illi_n_1460180.html

Pavlo, W. (2016). Forbes Welcome. Forbes.com. Retrieved 12 March 2016, from http://www.forbes.com/sites/walterpavlo/2013/02/14/fmr-dixon-il-comptroller-rita-crundwell-sentenced-to-19-12-years-in-prison/#368b391b5726

Pope, K. (2016). The $54 million fraud. Cpa2biz.com. Retrieved 12 March 2016, from https://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2013/ForensicValuation/54-million-dollar-fraud.jsp

Ray, R. (2016). Rita Crundwell case: Ex-Dixon comptroller to plead guilty to theft of $53 million, US says. NBC News. Retrieved 12 March 2016, from http://usnews.nbcnews.com/_news/2012/11/13/15142932-rita-crundwell-case-ex-dixon-comptroller-to-plead-guilty-to-theft-of-53-million-us-says?lite

Smith, H., Alger, V., Genter, K., Lawhorn, N., Lee, M., & Mitchell, H. et al. (2012). Comptroller, horse lady and crook, Part 1 of 2. Acfe.com. Retrieved 12 March 2016, from http://www.acfe.com/article.aspx?id=4294974482

Smith,, H. (2012). Comptroller, horse lady and crook, Part 1 of 2. Fraud-magazine.com. Retrieved 12 March 2016, from http://www.fraud-magazine.com/article.aspx?id=4294974482

Wells, J. T. (2014). Principles of fraud examination.