Feb 23, 2024 23:00:00

What is the result of the arrest of a financial officer who committed the largest embezzlement case in American history amounting to approximately 8 billion yen?

Rita Crundwell, who was the City of Dixon's treasurer at the time, was arrested in 2012 on charges of embezzling approximately $

53.7 million (approximately 8 billion yen) from the city's budget over 22 years starting in 1990. POLITICO, an overseas media outlet, explains the trial and what happened to Dixon City afterwards.

She Stole $54 Million From Her Town. Then Something Unexpected Happened. - POLITICO
https://www.politico.com/news/magazine/2023/05/12/dixon-illinois-city-fraud-betrayal-00075869

Crundwell was arrested in 1990 after he was discovered to have embezzled money by opening a secret bank account disguised as a city bank account and transferring city funds to his own account by creating fake invoices. This continued until 2012.

The city of Dixon's financial situation not only passed annual independent audits and state audits by the state of Illinois from 1990, when Mr. Crundwell began embezzling, until late 2011, but there was nothing wrong with the banks handling the city's accounts. He admitted that he didn't have any points.

However, during the time when Mr. Crundwell was committing embezzlement, the city of Dixon was in a dire financial situation, and despite problems such as broken ambulances, collapsed sidewalks, and damage to facilities, it was unable to make capital investments. budget was insufficient. In addition, severe budget restrictions on city services and layoffs of employees continued.

Mr. Crundwell admitted his guilt in a trial that began in 2012, and in February 2013, a judge

sentenced Mr. Crundwell to 19 years and 7 months in prison .

Following Mr. Crundwell's arrest and conviction, the Dixon City U.S. Marshal's office revealed that Mr. Crundwell had purchased five properties, dozens of cowboy hats, and

$250,000 (about $37.6 million) with embezzled city funds. JPY) worth of jewelry , approximately 400 racehorses, and racehorse genes worth $98,500 (approximately 14.8 million yen) were auctioned, resulting in approximately $10 million (approximately 1.5 billion yen) being recovered. success. In addition, we have obtained approximately $30 million (approximately 4.5 billion yen) in lawsuit settlements from related auditors and banks. Below is an example of the property Mr. Crundwell allegedly purchased with city funds.

Although the city was able to recover only a portion of the amount embezzled by Mr. Crundwell, the city of Dixon used the recovered funds to repair the public library, plumbing equipment, and roads, thereby regaining the trust of its citizens. I'm trying to do that.

Matthew Lennox, who works at the Dixon City Chamber of Commerce, said, ``With Mr. Crundwell's arrest, a renaissance -like movement began in the City of Dixon.''

POLITICO believes that the reason Krundwell's embezzlement went undetected for about 22 years is that the city of Dixon consolidated administrative and legislative functions into the City Commission, which passed ordinances and operated various city departments. It was a committee-type government.

This structure was fraught with problems, including a lack of the 'checks and balances' that are commonly institutionalized in other cities that do not use committee-based government.

Mr. Crundwell exploited this structure to gain control of checks, deposits, financial statements, and the flow of funds in the City of Dixon. He was designing a bookkeeping system for the city that other employees couldn't understand.

Kelly Richmond-Pope, an author and professor of accounting, explains why the discovery of Crundwell's embezzlement was delayed, saying, ``Audits are not meant to find fraud; the financial statements provided by city management are The purpose of the investigation is to determine whether the report accurately reflects the conduct of the management team.In this case, the 'management team' was none other than Mr. Crundwell, who had made special arrangements to pass the audit. 'It may have been possible,' he said.

At the time of writing, Dixon Mayor Danny Langloth said, ``Dixon City has suffered a great deal of damage due to Mr. Crundwell's embezzlement.However, the Dixon City community is getting over this.'' In fact, since Mr. Crundwell's arrest, Dixon City has abolished its old form of government, disbanded the city council, and adopted a format in which the mayor appropriately holds power.

In addition, Mr. Crundwell is said to have been released and returned to Dixon City in 2021 based on a special law in response to the outbreak of the new coronavirus infection.