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Prosecutor: Embezzlement plea a warning to others

Associated Press Modified: November 14, 2012 at 5:17 pm •  Published: November 14, 2012

ROCKFORD, Ill. (AP) — A federal prosecutor said Wednesday that a small-town Illinois bookkeeper's admission that she embezzled more than $50 million should serve as a warning for other public officials.

Gary Shapiro, the acting U.S. Attorney for northern Illinois, called the case of former Dixon comptroller Rita Crundwell "one of the most significant abuses of public trust ever seen in Illinois."

Crundwell pleaded guilty Wednesday to siphoning public money into a secret account while overseeing finances in President Ronald Reagan's boyhood home and spending it on a lavish lifestyle that included a nationally known horse-breeding operation.

"If nothing else, what we have in this case is an object lesson in how not to manage public funds," Shapiro said. "This is a crime that should never have been allowed to occur."

Crundwell, 59, pleaded guilty Wednesday to a single charge of wire fraud in federal court in Rockford. She was allowed to remain free until her Feb. 14 sentencing hearing and still faces 60 separate but related state felony charges for theft in Lee County. She has pleaded not guilty to those charges.

She has never commented publicly on the charges and did not make a statement during the hearing, answering the judge's questions with "yes" and "no." But afterward, her lawyer gave a brief statement that emphasized her cooperation with prosecutors.

"Rita Crundwell today admitted her guilt, saving the government the burden and expense of a lengthy trial," attorney Paul Gaziano said. "Rita, since the day of her arrest, has worked with the government to accomplish the sale of her assets, including her beloved horses, all with the goal of hoping to recoup the losses for the city of Dixon.

"I think the people of the city of Dixon ought to know that."

The U.S. Marshals service still has some assets in her name to sell, including about $450,000 worth of diamonds and other jewels, ranch land and a house in Florida. With the plea, she has agreed not to contest the forfeiture of her assets.

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