Who’s To Blame For Allowing the City of Dixon To Be Fleeced For $54 Million?

Jim Anderson -- Illinois Radio Network

Who’s to blame for allowing the city of Dixon to be fleeced for $54 million?

The city’s lawyer, Devon C. Bruce, places the blame mostly at the feet of the city’s accounting firm, which ultimately paid a $40 million settlement for failing to notice the embezzlement by the city treasurer.

In a speech to an audience of lawyers, accountants and bankers in Chicago, Bruce ran down the list of red flags that the firm Clifton Gunderson didn’t notice, including forged invoices from the Illinois Department of Transportation, ostensibly for the city’s share of road projects that never occurred.

“Clifton admitted to that in their cross-examination.  If there was a two-minute phone call down to Springfield to ask about any one of these invoices, we wouldn’t be here today,” he said.

Bruce says the city’s accounting firm also prepared the treasurer’s personal tax returns, and one year failed to question $300,000 in unexplained income.  Bruce says auditors failed to check minutes of council meetings to see if there were resolutions authorizing various expenditures, and whether any of the capital expenditures, such as police car purchases, really existed.

Bruce says in his review, he did not detect any complicity on the part of the accounting firm or the city’s bank – just lack of proper oversight.

The former treasurer, Rita Crundwell, stole most of the money by setting up a bogus city account at the bank where the city kept its funds, and periodically used phony vouchers to move money from legitimate city accounts into this one, from which she made withdrawals for personal use.  She is serving 19½ years in prison. The city has recovered most of the money.