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  1. #21
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    Quote Originally Posted by GotGait View Post
    It is just amazing that she managed to embezzle that much money from that little town, and no one raised an eyebrow. How could they not notice how she went from nothing to big deal QH diva on the salary they were paying her? It's not like her lavish lifestyle was a secret. She probably told them it was inherited, but then why would she still need to work for the city?! LOL
    I'm trying to figure that out, too. 53 million from a town of 18,000 over how many years? Someone was asleep at the wheel, and it wasn't Rita. I would think a State agency or the Feds need to be taking a look.
    Fan of the Swedish Chef


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  2. #22
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    Let's be realistic. If she gets out early for good behavior, she will still be 77 years old. Who knows what her physical condition will be by then and the chances of her working are slight. Another poke in the eye to Dixon/IL taxpayers is that they will now be footing a fair amount of her retirement, even tho she will give up her pension and did already give up her 401K. And then once she's released, she'll probably be on Social Security and Medicare.



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  3. #23
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    Quote Originally Posted by Go Fish View Post
    I'm trying to figure that out, too. 53 million from a town of 18,000 over how many years? Someone was asleep at the wheel, and it wasn't Rita. I would think a State agency or the Feds need to be taking a look.
    Not to mention that they *paid* an accounting firm to audit and certify their books.

    Plenty of civil suits to come, no doubt some involving professional malpractice.


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  4. #24
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    I seem to recall that a lawsuit was filed by the city or state against the auditors.

    I love the 'made a bundle from horses' remark.
    You can't fix stupid-Ron White



  5. #25
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    Hm. Is it customary for an auditing firm to actually physically verify the existance of all the vendors? I can think of a scenario where say, she was writing checks to Chuck's Carpet Cleaning or CCC after a while (cause that's how this stuff winds up in my books, after a while it's GMT GMT GMT for the feed store) and either the Chuck's went out of business or she created a dummy CCC for half the disbursements. Would an auditor be checking the routing numbers and account numbers on the cancelled checks? If they don't now I bet they WILL in future, more expense to have an audit that's for sure.
    Courageous Weenie Eventer Wannabe
    Incredible Invisible



  6. #26
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    I'm not too far from Dixon and I can verify most non-horse people really DO think it's perfectly reasonable to make a bundle with horses, especially if you have nice things. The whole deal is still just staggering though...
    Quarry Rat



  7. #27
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    I have found often that the finance office of municipalities overlook inappropriate conduct regarding spending. Not that 53 million is something to be overlooked but the politics and wasteful spending that goes on and not dealt with is amazing. I call it the Gravy Train Syndrome....they all reaping benefits for personal use. So to point the finger at others would mean everyone has to get off the gravy train. Not going to happen in government, whether a little town or larger. In our area a new tax payer funded equestrian center is home to the local sheriff's and his buddy's personal horses, all care, feed and shoeing paid for by the taxpayer. Employees also keep their personal horses there. It is a political thing...no one says no to the Sheriff. The taxpayers are spending over $100K a year for this arrangement that does zero for the general public on public property...no one cares. The politics win.



  8. #28
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    The audit at the manufacturing company I worked for years ago checked all the way through, from from the vendor through payment in spot audits.
    "We can judge the heart of a man by his treatment of animals." ~Immanuel Kant



  9. #29
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    In Federal prison you have to do 85% of your time in prison then halfway or finish where you are. there is no parole in Federal system.



  10. #30
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    Quote Originally Posted by oldernewbie View Post
    Not to mention that they *paid* an accounting firm to audit and certify their books.

    Plenty of civil suits to come, no doubt some involving professional malpractice.
    You mean the same people who also did Rita's personal accounts as well? Yup, Rita hired them.

    Quote Originally Posted by nashfad View Post
    In Federal prison you have to do 85% of your time in prison then halfway or finish where you are. there is no parole in Federal system.
    Ahh, but this is IL. They let George Ryan go home after prision release rather than a halfway house as scheduled.
    "I'm not crazy...my mother had me tested"



  11. #31
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    Quote Originally Posted by ReSomething View Post
    Hm. Is it customary for an auditing firm to actually physically verify the existance of all the vendors? I can think of a scenario where say, she was writing checks to Chuck's Carpet Cleaning or CCC after a while (cause that's how this stuff winds up in my books, after a while it's GMT GMT GMT for the feed store) and either the Chuck's went out of business or she created a dummy CCC for half the disbursements. Would an auditor be checking the routing numbers and account numbers on the cancelled checks? If they don't now I bet they WILL in future, more expense to have an audit that's for sure.
    As an auditor, I can state that fraud is very difficult to detect is standard auditing practices, and the engagement letter (think of it as the contract) usually specifies that the auditor is not responsible for detecting fraud.

    Auditing involves spot-checking accounts for internal controls and proper accounting treatment. For instance, if the city/business writes 1,000 checks, the auditor may check all checks over a certain amount and a random sample of others to make sure things such as manager's approval, that items were received, that documents have proper approval, and recording in proper accounts are done. Auditors will check a sample of vendors and confirm with a large vendor that the entity actually spent $xx with them that year. We do not go through every single item to make sure that everything is perfectly correct.

    Auditors also compare acccount balances to prior years or other expectations and look for unusual changes, i.e., that the entity usually spends $100 on supplies isn't suddenly spending $10,000 without proper documentation to explain the difference. But if someone is creating invoices and increasing every account by a couple hundred? Not likely to be caught if they are good at dummying invoices and faking approval signatures.

    Auditors do (or should!) keep our eyes open for anything that seems "hinky", but a good, intelligent criminal can unfortunately easily avoid detection if they are careful (most are caught because they get greedy and take enough to be detectable after they have gotten away with it over a period of time).

    The huge problem with every small government (and small business!)I have seen is that they lack enough people to have good segregation of duties and they end up with a "family" feel, believing that "Joe" is a good guy who would never steal because they've worked beside each other for years and know his wife, and thus let their guard down, not realizing that Joe is also supporting a girlfriend, has a gambling problem, etc.

    When you have only one person opening mail, checking in vendors, coding the accounting records,writing the checks and balancing the bank statements, you have given them the keys to the kingdom.

    When supervisors barely glance at the pile of invoices given to them to sign off on, you have a problem.

    When you trust "Suzie-Q" and have her recording the incoming revenue and reconciling the bank statements and never check to see that you have received what you were supposed to, don't be suprised to see that she suddenly has a new expensive hobby and great new clothes.

    And if someone you are working with suddenly comes into a large inheritance, check to see if someone they know actually died; you'd be suprised to know how often that is used to explain away sudden riches.


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  12. #32
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    It says in the article that no one had a clue until a clerk opened a letter. Did someone "drop a dime on her" or was it something from the bank?
    "I've spent most of my life riding horses. The rest I've just wasted". - Anonymous



  13. #33
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    I have worked with auditors in private industry. They follow an order from the original PO, our invoice, the proof of delivery for the goods, the check from the buyer with remittance where the invoice number is noted. The auditor may give us 100 random invoice numbers to pull, and we provide the documentation for each step in the sales process.

    StG



  14. #34
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    She was using the grant money coming into the county of which there was not a direct record. She set up false accounts and as she took the money and put it in other accounts she would enter an "interest" rate showing funds coming in. When they asked about the account she always had an answer and could show movement of money. The county did not understand so they just accepted it.

    She did not take existing county money so there was no trail of missing money


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  15. #35
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    Quote Originally Posted by Fairfax View Post
    She was using the grant money coming into the county of which there was not a direct record. She set up false accounts and as she took the money and put it in other accounts she would enter an "interest" rate showing funds coming in. When they asked about the account she always had an answer and could show movement of money. The county did not understand so they just accepted it.

    She did not take existing county money so there was no trail of missing money
    Grant money does not just "fall from above"; where were the supervisors who should have been well-informed of what grants were approved, and expecting that money for certain uses? How do you explain to those in charge when that $$ was not available for the intended use?

    And the auditors certainly should have confirmed amounts of any grant funds with the grantor agency, and traced that to proper accounts. That would make them definitely on the hook. Or was she properly recording it the first time, then moving it and explaining it away as payments to the proper parties?

    I would love to see how she managed this step by step without detection.


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  16. #36
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    Quote Originally Posted by StGermain View Post
    I have worked with auditors in private industry. They follow an order from the original PO, our invoice, the proof of delivery for the goods, the check from the buyer with remittance where the invoice number is noted. The auditor may give us 100 random invoice numbers to pull, and we provide the documentation for each step in the sales process.

    StG
    And the issue always is if the sample of 100 invoices doesn't include any errors or anything to require a second look, the rest of the invoices that are not sampled don't get a glance.

    It's a game of odds; did you select the possibly fraudulent ones, or are they still out there? And how many can you check before it isn't cost-effective?


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  17. #37
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    Quote Originally Posted by NJRider View Post
    I have found often that the finance office of municipalities overlook inappropriate conduct regarding spending. Not that 53 million is something to be overlooked but the politics and wasteful spending that goes on and not dealt with is amazing. I call it the Gravy Train Syndrome....they all reaping benefits for personal use. So to point the finger at others would mean everyone has to get off the gravy train. Not going to happen in government, whether a little town or larger. In our area a new tax payer funded equestrian center is home to the local sheriff's and his buddy's personal horses, all care, feed and shoeing paid for by the taxpayer. Employees also keep their personal horses there. It is a political thing...no one says no to the Sheriff. The taxpayers are spending over $100K a year for this arrangement that does zero for the general public on public property...no one cares. The politics win.
    The political climate may now be right for you guys to object.
    The armchair saddler
    Politically Pro-Cat


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  18. #38
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    Quote Originally Posted by CFFarm View Post
    It says in the article that no one had a clue until a clerk opened a letter. Did someone "drop a dime on her" or was it something from the bank?
    A "filler" was who caught the odd looking account that couldn't be matched up & brought it to the mayor's attention. He after looking into it contacted the Feds & they took over.

    Moonover Mississippi is correct...she was a local girl who out of high school started working for Dixon. How this slipped thru the cracks was the lack of checks & balances for accountability, the changing of banks several times, people's assumptions, etc... No it wouldn't happen today, but given that is started over 20 years ago & built up (it's not like she took a few million the first year) plus given the current economy people believed what they were told.

    Here is an article I read that I thought really did a good job with the story. http://www.chicagomag.com/Chicago-Ma...ticle=0#artanc
    "I'm not crazy...my mother had me tested"


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  19. #39
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    Quote Originally Posted by CFFarm View Post
    It says in the article that no one had a clue until a clerk opened a letter. Did someone "drop a dime on her" or was it something from the bank?
    This is what one article says:

    Crundwell's alleged scheme caught the eye of Dixon Mayor James Burke, who called law enforcement in the fall after he said a city employee took over for Crundwell when she took an unpaid extended vacation.The city employee sent a bank account statement to Burke while filling in for Crundwell, and the Dixon mayor was unaware that the account even existed, according to the complaint.There were 40 withdrawals on the account totaling $266,000, and the withdrawals appeared suspicious to Burke because the banking activity was not related to city business.The account's primary account-holder is listed as Dixon, but the joint account holder is RSCDA, and checks written in the account were done under the name R.S.C.D.A., C/O Rita Crundwell, the complaint said.


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  20. #40
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    Quote Originally Posted by Giddy-up View Post
    A "filler" was who caught the odd looking account that couldn't be matched up & brought it to the mayor's attention. He after looking into it contacted the Feds & they took over.

    No it wouldn't happen today, but given that is started over 20 years ago & built up (it's not like she took a few million the first year) plus given the current economy people believed what they were told.
    Unforunately, you would be surprised at how much it still goes on today. And many, many places just let people go for the little stuff, not wanting the bad publicity. But most who are fired for the little stuff don't stop, they just move on to the next place.

    And it is not uncommon for places we audit to be "unhappy" at the controls we recommend they put in place. "Well, I don't think we need to keep doublecheck after Suzie Q, but if you insist" and similar is heard often.
    No one likes adding those extra steps to their processes (adding work) and will often only follow them haphazardly.



    The fraud triangle is interesting to read up on (okay, I'm definitely an auditing nerd); all you need are three things for almost anyone to commit fraud:

    1) Perceived opportunity- "I think I could get away with it"
    2) Perceived pressure - "I have to have money because of xyz"
    3) Rationalization - " I deserve it because......"

    Each of the above are different for each person;
    for one it might be 1) no one is checking my work 2) Wife is bitching about wanting a cruise and 3) I didn't get a raise last year

    but for another it is:
    1) no one is checking my actions, 2) Daughter must have surgery or she will die and 3) I know they would give me the money for my daughter if they could so I'll just take it but pay it back as soon as I can

    A business/government can't do anything about pressure or rationalization except try to hire very honest people, but you can do something about opportunity by putting controls in place to prevent or detect fraud......but that is what places often ignore or put no effort into, believing that co-workers or employees would never ever steal.


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