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In brief: Comptroller’s $54 million fraud yields lengthy prison sentence

Fri., Feb. 15, 2013

ROCKFORD, Ill. – Disgraced former Dixon, Ill., comptroller Rita Crundwell was sentenced Thursday to about 19 1/2 years in prison for what authorities have called the largest municipal fraud in the country’s history.

U.S. District Judge Philip Reinhard ordered Crundwell taken into custody immediately to begin serving the sentence of 19 years and 7 months.

Crundwell pleaded guilty to stealing nearly $54 million from the small northwest Illinois town over more than two decades to fund a lavish lifestyle while the town’s budget was awash in red ink.

U.S. marshals have been working to recoup some of the losses to repay the town. So far, they have collected about $11 million from the sale of Crundwell’s 400 horses, personal property, a luxury motor home and other vehicles.

Crundwell’s legal woes won’t end with the federal sentencing. She still faces 60 state charges of felony theft, each of which carries a potential sentence of up to 30 years in prison on conviction. That case is due back in court in Lee County on March 4.

Ex-mayor to pay restitution for gambling with charity money

SAN DIEGO – Former San Diego Mayor Maureen O’Connor acknowledged in federal court Thursday that she gambled away millions of dollars that her late husband had earmarked for charity purposes.

Looking frail, the 66-year-old O’Connor agreed to enter into a deferred prosecution on a charge of stealing the money from a charitable foundation. Under a bargain with prosecutors, O’Connor agreed to make $2 million in restitution; if she violates no further laws in the next two years, the charge may be dismissed.

O’Connor was the city’s first woman mayor, serving from 1986 to 1992. Her husband, Robert O. Peterson, who died in 1994, founded the Jack in the Box fast-food chain and made a fortune in the restaurant, hotel and banking industries.

O’Connor is destitute after gambling away nearly $1 billion at casinos in the San Diego area and Las Vegas from 2008 to 2009, according to prosecutors. She has admitted having a gambling addiction, prosecutors said.

O’Connor used a cane and needed help walking as she entered the courtroom of federal Judge David Bartick. In her youth, she had been a star swimmer and later a physical education teacher before being elected to the City Council as a maverick Democrat.


 

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