We’re still learning lessons from the plundering of Dixon. One of the ways the city comptroller was able to steal $53 million over two decades was by setting up a bogus bank account in the city’s name, with herself as the only signatory.
Devon C. Bruce, the lawyer who investigated for the city, says the bank should have demanded a council resolution. “It may seem commonplace that you have the treasurer walk over and open a bank account, but there are banking standards and there are banking practices that say we need a resolution. I’m sorry, I know you’re the treasurer, we need a resolution. We need more than one signer to the account,” he said.
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Bruce also suggests, in hindsight, that the firm that audited the city’s books should have rotated accountants, so that fresh eyes might have noticed problems, and put some more experienced people on the job, and that the auditors should have been more skeptical, calling vendors to see if invoices were legitimate, and asking to see supposed capital expenses, such as new police cars or sewer mains.
The ex-comptroller, Rita Crundwell, is serving 19½ years in prison for the largest municipal fraud in American history. The city recovered most of the money -- $10 million from the auction of Crundwell’s assets, and $40 million from the auditors and the bank.
The theft occurred over a period of 22 years and was finally sniffed out in 2011. Crundwell was convicted of wire fraud in 2012.