How Crundwell Did It & Why Auditors Are Also To Blame

Rita Crundwell used dozens of fake invoices to move money from the City of Dixon’s accounts to her own, Attorney Devon Bruce revealed on Thursday, September 26th, 2013.

Bruce is part of the Chicago law firm, Power Rogers & Smith, and represented the City of Dixon in its lawsuit against the city’s former auditors. On Wednesday, September 25th, 2013, the firm announced that a settlement had been reached and they obtained $40 million from the three groups of auditors, including CliftonLarsonAllen.

On Thursday, Bruce held a press conference to show how Crundwell stole more than $50 million from her city/employer and why the city’s auditors should have noticed something was wrong.

Bruce showed fake invoices, created by Crundwell, supposedly from the Illinois Department of Transportation, that Crundwell would then pay from a city account to her own. Bruce says in comparison to real invoices from the State of Illinois, auditors should have seen the difference.

“The discrepancies are obvious and should have been obvious for over 20 years to Clifton[LarsonAllen], he said while displaying giant posters comparing a copy of a fake invoice with a copy of a real one.

The evidence was also discussed back in February 2013 when News 8’s Christ Minor sat down with Bruce in an exclusive interview. Back then, in a letter to News 8, CliftonLarsonAllen said they did nothing wrong. Seven months later, they now say “there was a shared responsibility that resulted in Ms. Crundwell’s fraud.”

“Part of the audit is to identify fraud, irregularities, and theft in the city’s financial statements,” Bruce said on Thursday. “That’s the duty and responsibility of an auditor.”

While this closes one chapter, Dixon’s Mayor says this story is not over yet. Hours after the settlement was announced, News 8’s Brittany Lewis sat down with Mayor Jim Burke, who said “that $40 million speaks for itself” and believes there could be more money on the way.

“The U.S. Attorneys Office are seeking recovery of any assets at all that they have an inkling about that she’s got,” said Mayor Burke.

Mayor Burke says the next step for the city is to hold a public meeting and talk about their financial situation now that a $40 million settlement has been reached.

“We borrowed a lot of money becuase of what she was doing so we want to get those debts and obligations taken care of and then when we get done with all of that we’ll see how much money we got left and then where we go from here.”

But no matter where they go, it will be a new direction for Dixon. Mayor Burke says they have put a lot of financial controls in place since last April, including new software, new personnel, and they are currently in the process of hiring a City Administrator.

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