In a move the White House called “the largest single-day grant of clemency in modern history,” President Joe Biden has commuted the sentences of 1,499 people, including one woman convicted of embezzling more than $53 million in taxpayer money. The news that Rita Crundwell would finally be set free has been met with dismay in some circles, including in the town whose accounts she raided.
Rita Crundwell
Before she went to prison, Rita Crundwell, now 71-years old, had lived in or near Dixon, Illinois, for most of her life. Dixon, which is also the boyhood home of Ronald Reagan, is about 100 miles west of Chicago. The city is named after John Dixon, who operated a rope ferry service across the Rock River, a nearly 300-mile-long tributary of the Mississippi River. Today, the city is home to about 15,000 people.
Crundwell landed her first government job as a work-study student in Dixon. In 1983, she was named as the city’s comptroller and treasurer. (Typically, the treasurer manages the money and protects the assets, while a comptroller—sometimes called a controller—acts as an accountant.) She kept those jobs through 2012, when she was fired.
According to court documents and government statements, Crundwell was accused of embezzling $53.7 million from the city of Dixon over two decades (after the initial investigation, authorities suggested that the fraud had gone on ever longer). She used the money to fund her lavish lifestyle, including breeding American Quarter Horses—something that would have been nearly impossible to do on her $80,000 government salary.
To pull off the fraud, Crundwell opened a bank account that she created to look like a city account. She was the only signatory. She siphoned money from the city of Dixon to the account at a clip of about $2.5 million per year by creating false invoices. Despite the fact that the city’s annual budget fell between $8-$9 million per year, no one noticed. They did, however, notice that the budget showed a shortfall, forcing Dixon to make cuts, including to emergency services.
Like most municipalities, Dixon had outside auditors, Clifton Gunderson—now CliftonLarsonAllen—but they routinely signed off on the city’s financial statements. (The city eventually sued the auditors and Fifth Third Bank, which made the money transfers, and reached an out-of-court settlement.)
In 2012, Crundwell was arrested by the FBI following an investigation. The city’s acting comptroller, Kathe Swanson, discovered the dummy account while Crundwell had been on leave and reported it to the city’s mayor.
Following her arrest, Crundwell agreed to the liquidation of assets that she had acquired with proceeds from her decades-long fraud scheme. By the date of her sentencing, the U.S. Marshals Service has recovered more than $12.38 million from sales, including online and live auctions of approximately 400 quarter horses, vehicles, trailers, tack, a 2009 luxury motor home, a 2005 Ford Thunderbird convertible, a 1967 Chevrolet Corvette roadster, a pontoon boat, jewelry and personal belongings. Under federal law, the government can continue to obtain restitution for up to 20 years after a defendant is released from prison.
In November of 2012, Crundwell pleaded guilty to wire fraud and admitted to engaging in money laundering. At the time, the Department of Justice said that it was “believed to be the largest theft of public funds in [Illinois] state history.”
Crundwell was sentenced to 19 1/2 years in prison. According to the Department of Justice, she was required to serve at least 85% of her sentence—there is no parole in the federal prison system. She was also ordered to pay the city of Dixon restitution, totaling $53,740,394.
Crundwell was released in mid-2021 to serve the remainder of her sentence in home confinement as part of CARES Act provisions for certain non-violent prisoners. Before the commutation, Crundwell was expected to be released from her home confinement on October 20, 2028.
(Crundwell was also indicted on 60 state counts of theft, alleging that she stole $11.2 million from April 2010 until the day of her arrest. Those charges were considered “a backup” if the federal charges didn’t result in a conviction. Crundwell pleaded not guilty to the state charges, and they were dropped following her guilty plea in federal court. Illinois sentencing guidelines require state and federal sentences to run concurrently, so Crundwell would have served her state time while serving her federal time. A federal commutation, however, would not have applied to any state sentence.)
Reactions
The move came as a surprise to many, including Glen S. Hughes, the mayor of Dixon. He told Forbes that he did not have any communication with the White House, clarifying, “there was no contact from the White House before the decision, and there doesn’t seem to be much point to my making contact after the fact.”
In an emailed statement, he said, “As Mayor of the City of Dixon, I believe that most of the City is probably stunned, and maybe even angry, that President Biden would provide clemency to Rita Crundwell, the preparator of probably the largest municipal misappropriations of funds in U.S. history. The Crundwell incident is one that the City would like to move past, but this action has rubbed salt in the wound.”
He continued, “Although today’s news will be a dark moment in Dixon’s history, Dixon has recovered very nicely both financially, and developmentally, from the Crundwell days. Dixon is a great community to live in. We are focused on continuing to enhance the community, and are positive about its strength for the future.”
Danny Langloss, Jr., the city manager of Dixon, echoed those comments, writing in an emailed statement, “The City of Dixon is shocked and outraged with the announcement that President Biden has given Rita Crundwell clemency for the largest municipal embezzlement in the history of our country. This is a complete travesty of justice and a slap in the face for our entire community.”
Langloss, too, stressed that the news would not stop the city from moving ahead, saying, “While today’s news is unimaginable, the City of Dixon is in an incredible place today. We will continue to focus on the future and work to capitalize on the momentum we have created.”
The fraud caught the attention of those outside of Dixon, too. In 2017, CPA and former Forbes contributor Kelly Richmond Pope directed and produced “All the Queen’s Horses,” a documentary that examined how Crundwell was able to get away with stealing for so long. When asked about the commutation, Pope said, “The commuting of her sentence was just an end to an already bad decision.”
“What I think is more shocking is Crundwell’s early release in 2021,” she explained, saying, “I was stunned in 2021. Crundwell only serving 8-1/2 years on a 19 year, seven month federal prison sentence is quite unbelievable. Had it not been for COVID, I suspect Rita would still be in prison.”
“I wonder,” she mused, “if [Biden] knew that Crundwell was the largest municipal fraudster in U.S. history because this decision definitely sends a confusing message.”
Clemency v. Commutation v. Pardon
In addition to the commutations, Biden also pardoned 39 individuals who were convicted of non-violent crimes. That’s in addition to Biden’s decision to pardon his son, Hunter Biden, who had pleaded guilty to gun and tax crimes.
The legal terms—clemency, commutation and pardon—are sometimes tossed around as though they are the same thing, but they are not.
A pardon is an act of executive power that results in the complete forgiveness of a crime. The result is an absolution of guilt, meaning the conviction is wiped out. Any related penalties that might apply to the crime—like the inability to hold public office or vote—are also eliminated. In that way, a pardon more or less restores you to the way that you were before the conviction. That means, for example, that you do not have to disclose that you were ever convicted on future job applications.
Article II of the Constitution grants the President the “Power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment.” (Notably, the power only applies to federal offenses and does not include state crimes.)
A commutation is not as powerful. A commutation shortens or eliminates the punishment for a crime but does not erase the conviction—the guilty label still stands.
Clemency is used to describe both pardons and commutations. It’s a catch-all phrase for mercy or relief from punishment.
Biden Commutations Followed Trump Law
According to the White House, the sentence commutations focused on those placed in home confinement during the Covid-19 pandemic and who have successfully reintegrated into their families and communities. To qualify for a commutation, individuals must have served their sentences at home for at least one year under the CARES Act.
The original law was signed by then-President Trump on March 27, 2020, and expanded the time that individuals could be placed in home confinement during the “covered emergency period” that began on March 13, 2020. To be eligible for the program, individuals must have no history of violence, terrorism or sexual offending; a clean disciplinary record for the preceding 12 months and no history of violence or gang involvement whatsoever while in prison; a viable release plan; a minimum (later amended to low) risk score on the Bureau of Prison’s risk-assessment tool; and had served a substantial portion of their prison sentence in custody and had been placed in a low or minimum security facility. A report issued in 2023 indicated that since March 26, 2020, the BOP has successfully placed 13,204 individuals in home confinement under the law, with 3,627 inmates remaining in the CARES Act home confinement program as of May 27, 2023. That same year, the Attorney General finalized rules to ensure that individuals placed in home confinement under the law were not unnecessarily returned to prison.
Biden Pardons
Biden also pardoned 39 individuals who were convicted of non-violent crimes. Among those pardoned included several military veterans, including two 79-year-old retired U.S. Air Force airmen, one of whom pleaded guilty to a non-violent offense at the age of 20. You can see the list here.
Next Steps
Biden may not be finished. According to the White House, “In the coming weeks, the President will take additional steps to provide meaningful second chances and continue to review additional pardons and commutations.” Stay tuned.
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