1. TRUST BUT VERIFY: THE RITA CRUNDWELL STORY Text Saturday, January 25, 14

2. THINGS ARE NOT ALWAYS AS THEY SEEM Saturday, January 25, 14 3. DIXON, ILLINOIS Saturday, January 25, 14 4. RITA CRUNDWELL City Comptroller and Treasurer Saturday, January 25, 14 5. HOW MUCH WAS STOLEN? Saturday, January 25, 14 6. $53 MILLION LARGEST MUNICIPAL FRAUD IN U.S. HISTORY Saturday, January 25, 14 7. HOW LONG DID SHE STEAL? Saturday, January 25, 14 8. OVER 20 YEARS Saturday, January 25, 14 9. HOW WAS THE FRAUD DISCOVERED? Saturday, January 25, 14 10. SUBSTITUTE CONTROLLER FOUND THE FRAUD Saturday, January 25, 14 11. PEPTO BISMOL MOMENT Mayor James Burke I literally became sick to my stomach, and I hoped all my suspicions were all wrong. Saturday, January 25, 14 12. Saturday, January 25, 14 13. RESULTS OF AUDITS No Instances of Noncompliance Saturday, January 25, 14 14. RESULTS OF AUDITS Clean Opinion Saturday, January 25, 14 15. HOW SHE DID IT Saturday, January 25, 14 16. HOW SHE DID IT Rita opened an unauthorized RSCDA bank account in 1990 Saturday, January 25, 14 17. HOW SHE DID IT Rita opened an unauthorized RSCDA bank account in 1990 RSCDA account was not set up on the citys general ledger Saturday, January 25, 14 18. HOW SHE DID IT Saturday, January 25, 14 19. HOW SHE DID IT Rita wrote checks from a legitimate city bank account to Treasurer - then she deposited those checks into the RSCDA bank account Saturday, January 25, 14 20. HOW SHE DID IT Rita wrote checks from a legitimate city bank account to Treasurer - then she deposited those checks into the RSCDA bank account Entries made: Dr. Cr. Saturday, January 25, 14 21. HOW SHE DID IT Rita wrote checks from a legitimate city bank account to Treasurer - then she deposited those checks into the RSCDA bank account Entries made: Dr. Cr. Capital outlay $500,000 Saturday, January 25, 14 22. HOW SHE DID IT Rita wrote checks from a legitimate city bank account to Treasurer - then she deposited those checks into the RSCDA bank account Entries made: Dr. Cr. Capital outlay $500,000 Cash $500,000 Saturday, January 25, 14 23. HOW DID PAYMENTS APPEAR IN THE AUDIT REPORT? Saturday, January 25, 14 24. CITY OF DIXON ILLINOIS STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES DEFICITS GOVERNMENTAL FUNDS Year Ended April 30 2011 EXPENDITURES General government Public safety Police protection and community relations Fire fighting and prevention and emergency vehicle Public works Highways and streets Traffic development WelfareCivil Defense Culture and recreation Airport operations Cemetery operations Capital outlay Debt service Principal Interest 1865160 11342 51230 63981 2859124 1395520 176479 Illinois Municipal NonMaW 731015 Municipal Municipal Sales Capital Governmental General All RedremeM Tax Devalooment Funds REVENUES 232474 General property taxes 1996489 450095 1285539 Foreign fire insurance tax 754836 189888 24289 Irdergovernniental revenues 3018740 1298390 3465905 550632 Licenses permits and other fees 282192 Fines and penalties 129461 Charges for services 428142 Revenue from use of money and property 58351 12605 75 36 11218 Other 402776 176 60000 69694 Total revenues 5829658 1356917 462700 3465980 60036 2369514 EXPENDITURES General government Public safety Police protection and community relations Fire fighting and prevention and emergency vehicle Public works Highways and streets Traffic development WelfareCivil Defense Culture and recreation Airport operations Cemetery operations Capital outlay Debt service Principal Interest 1865160 11342 51230 63981 2859124 1395520 176479 140968 731015 170519 87091 6670 523880 1420662 232474 5376412 475666 679000 264032 754836 189888Saturday, January 25, 14 25. HOW SHE DID IT Saturday, January 25, 14 26. HOW SHE DID IT Rita created 179 ctitious Illinois D.O.T. invoices to support the payments Saturday, January 25, 14 27. HOW SHE DID IT Rita created 179 ctitious Illinois D.O.T. invoices to support the payments Rita paid personal expenses out of the RSCDA off-the-books bank account Saturday, January 25, 14 28. CHECK EXAMPLE Saturday, January 25, 14 29. REAL INVOICE Saturday, January 25, 14 30. FAKE INVOICE Saturday, January 25, 14 31. WHATS WRONG WITH THE INVOICE? Saturday, January 25, 14 32. WHATS WRONG WITH THE INVOICE? No Illinois D.O.T. logo Saturday, January 25, 14 33. WHATS WRONG WITH THE INVOICE? No Illinois D.O.T. logo Misspelled the word Section Saturday, January 25, 14 34. WHATS WRONG WITH THE INVOICE? No Illinois D.O.T. logo Misspelled the word Section Round dollar amounts billed Saturday, January 25, 14 35. WHATS WRONG WITH THE INVOICE? No Illinois D.O.T. logo Misspelled the word Section Round dollar amounts billed No phone number on invoice Saturday, January 25, 14 36. FAKE INVOICE No Logo Misspelled Round Dollar Amounts No Phone # Saturday, January 25, 14 37. POSTSCRIPT Rita is serving 19.5 years in prison City recovered approximately $10 million by selling Ritas property Saturday, January 25, 14 38. POSTSCRIPT City sued: Janis Card Samuel Card Clifton, Larson, Allen Fifth Third Bank Saturday, January 25, 14 39. THE PARTIES SETTLED FOR $40 MILLION Saturday, January 25, 14 40. CLOSING THE GATE Dont allow one person to control an accounting process Saturday, January 25, 14 41. CLOSING THE GATE Map your internal controls Saturday, January 25, 14 42. PERFORM SURPRISE AUDITS Saturday, January 25, 14 43. CLOSING THE GATE If all else fails, have a sufcient delity bond Saturday, January 25, 14 44. MOST IMPORTANT Dont Ignore Signs Saturday, January 25, 14 45. ITS FINE TO TRUST, BUT ALWAYS VERIFY Saturday, January 25, 14