Settlement
$40 Million Recovery – Accounting & Banking Malpractice
Devon C. Bruce
Contingent Commercial Litigation: This case involves the embezzlement of $53 million dollars from the City of Dixon. by Rita Crundwell, who served as comptroller and treasurer of Dixon, Illinois, from 1983 to April 2012. This was reported to be the largest embezzlement of a municipality in the history of the United States. Plaintiff, the City of Dixon, brought a negligence action against Clifton, Larsen, Allen, Fifth Third Bank and Janis Card & Associates. Clifton, Larsen, Allen was the accounting firm hired by the City of Dixon to perform the City’s annual audits throughout the time period of Rita Crundwell’s theft. Plaintiff alleged that Clifton was negligent in that it failed to discover the theft of the money during the performance of their annual audits. Clifton was further negligent in not reporting and/or investigating numerous irregularities in Rita Crundwell’s tax returns. Fifth Third Bank and its predecessor banks held multiple City of Dixon. accounts as well as a “secret” account improperly opened in the City of Dixon’s name by Rita Crundwell which she used to deposit the stolen City of Dixon’s funds. Rita Crundwell then used the account to pay for numerous personal items such as jewelry, automobiles and to finance her equestrian business. Plaintiff alleged that Fifth Third Bank was negligent in allowing Rita Crundwell to open the secret account and also failed to disclose the existence oft his account in annual bank confirmations to the City’s accountants. Plaintiff alleged that Janis Card & Associates was negligent in failing to identify the theft and by entering into a joint venture with Clifton, Larsen, Allen to perform the City of Dixon audits after 2005.