Bank and accountants to pay $40M settlement in city embezzlement case
An Illinois bank and two accounting firms have agreed to settle for $40 million a lawsuit over a massive, nearly two-decade-long embezzlement by the then-treasurer of the city of Dixon, its mayor says.
The bulk of the settlement, around $36 million, will come from accounting firm CliftonLarsonAllen, Northern Public Radio and the Daily Chronicle report. Fifth Third Bank and Sam Card Accounting will pay $2.85 million and $1 million, respectively, to settle the Lee County suit, the Wall Street Journal (sub. req.) reported.
The town’s former comptroller, Rita Crundwell, 60, was sentenced in February to nearly 20 years in federal prison after pleading guilty to a single count of wire fraud. She also admitted money laundering, the Chicago Tribune notes. She embezzled a total of $54 million, authorities have said.
A spokesman for the bank said it had settled without admitting liability, the Wall Street Journal reported.
Gordon Viere, the CEO of CliftonLarsonAllen, said in a written statement that all parties affected by the Crundwell case should view it as an opportunity for evaluation of what happened.
“We believe there was a shared responsibility that resulted in Ms. Crundwell’s fraud continuing undetected, and the right thing to do is reduce the harm experienced by the taxpayers of Dixon and put this matter behind us,” he wrote. “Reaching a fair settlement for taxpayers is important to CliftonLarsonAllen.”
The head of the Card firm could not be reached by the WSJ for comment.
James G. Burke serves as mayor of the town of some 15,700 residents. He called the settlement “a huge day for us” and said it would leave the municipality “in good shape” even after some $10 million in legal fees.
He said he and attorney Devon Bruce, who represented the city, wound up having a steak dinner along the Chicago River at about 2 a.m. on Saturday after a marathon 17-hour-plus negotiation session brought home the bacon.
“I didn’t know when we got into this thing exactly how it was going to come out. I knew we had a good case,” Burke said. “My only advice to our lawyer was don’t leave any money on the table, and I don’t think he did.”
See also:
ABAJournal.com: “Illinois Town Whose Comptroller Is Accused of Embezzling $53M Blames Auditors in Civil Suit”
ABAJournal.com: “Horse-loving ex-city comptroller who embezzled $54 million gets 19.5 years in prison”
