City of Dixon sues auditors

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The City of Dixon, Illinois filed a civil complaint alleging professional negligence and negligent misrepresentation by firms contracted to audit city funds.

The lawsuit was filed Friday, June 8, 2012.

The complaint names Janis Card Company, LLC and Samuel S. Card and his CPA business as defendants. 

READ:  Dixon civil complaint against audit firms

The firms were responsible for fiscal audits for the city for more than five years.  The city alleges the defendants “failed to properly perform audits and other financial services,” that allowed former comptroller Rita Crundwell to embezzle millions of dollars from city accounts undetected. 

Read more of our coverage of the Rita Crundwell investigation - click here.

The defendants are accused of making “material representations to the City of Dixon that there were no irregularities in the City of Dixon accounts.”

The complaint cites various letters and reports from the defendants which repeatedly cite no irregularities or reportable conditions regarding the city’s accounting practices or financial statements.   

The complaint names two banks, a third accounting firm and two of its employees as defendants because those respondents could “have information essential to the determination of who should properly be named as defendants in this action.”

The complaint seeks damages in excess of $50 million on each count.