Back in April, Rita Krundwell was arrested on the charge of stealing money from the town of Dixon, Illinois….where she used to be the comptroller.
This April 18, 2012 news story has in its subtitle: "Rita Crundwell is charged with stealing more than $3.2 million in public funds."
How much more?
Well, this other story from April 18 gives more details:
The comptroller of a small city in Illinois is accused of misappropriating more than $30 million in city funds and using the money to support a "lavish lifestyle," including a large farm with over 150 horses, over $339,000 in jewelry, and numerous vehicles.
What amount did they end up saying she actually took?
A former comptroller for a small town in Illinois pleaded guilty to embezzling $53 million from city accounts to feed a lavish lifestyle that included a nationally known horse-breeding operation.
Rita Crundwell, 59, pleaded guilty Wednesday to wire fraud in federal court for siphoning off taxpayer dollars to her secret bank accounts while comptroller of Dixon, Ill., the boyhood home of former President Ronald Reagan.
The Reagan reference is a nice touch.
There are lots of insane pieces here. First, they obviously hadn't been audited. Ever. She supposedly started embezzling in 1990. So this went on for over 20 years. The (current) annual budget evidently is around $8 – $9 million, so even if you spread the $53 million over two decades, it would be a substantial percentage of the budget.
The amusing thing is how she got caught: the person covering for her while she was taking a vacation last year found the secret bank account Crundwell used for the embezzlement.
It is well known in the financial services world that one red flag for internal fraud is an employee who never takes vacation, or who is always connected to the system. Because they have to keep all the balls in the air as they funnel money and transactions around, to not be caught. It's pretty common to have mandatory required vacation during which you're not allowed to access the company systems in the financial world, as a basic protection against this sort of thing.
I guess Crundwell figured that she hadn't been found out in twenty years, so why worry? She was living an obviously lavish lifestyle with no comment from others — she must have felt bulletproof. Why would a temp ever figure out the transactions and accounts she had been using?
I'm sure there are lots of other officials in similar situations. We've seen it with affairs, obviously, and some don't even bother hiding what they're doing.
jefferson101 on November 16, 2012 at 7:36 pm said:
Do you have any idea how much it costs to do those Audits? We got to cut expenses, and that's one of the first places that gets cut, usually.
And why would this surprise you?
meep on November 19, 2012 at 8:25 am said:
Well, I'm not expecting annual audits, but say once every five years would be reasonable.
In any case, of course every company I've worked for has annual audits and an internal audit function (that is separate from the CFO)…but that's par for the course in the financial industry. We had audits that aren't even regulatorily required. But then when it's your "own" money, as opposed to "other people's money", you pay a lot more attention to whether someone is stealing from you.