In April 2012 the town of Dixon, Illinois was rocked by a huge scandal – the largest municipal

fraud ever was discovered in this small mid-west town of 16,000 people. All the Queens Horses,

a film by Kelly Richmond Pope, examines how it occurred, how it was discovered and offers

insight on the role we all play in preventing similar things in our communities. It is entertaining,

educational, and a warning to all of us that we should be paying better attention to those we trust

with our hard-earned money.

Kelly Richmond Pope PhD., CPA, is a forensic accounting professor at De Paul University

specializing in corporate crime. She made the film in 2017 because she found the story intriguing

and she wanted to understand how the crime happened and explain how it could happen

anywhere.

Rita Crundwell, the financial controller for Dixon was found to have single-handedly embezzled

approximately $53 million over 20 years, more than $20 million of it between 2008 and 2012. To

put this in some perspective, in the Association of Certified Fraud Examiners (ACFE) Report to

the Nation in 2022 they estimated that the median loss from a single instance of occupational

fraud is $100,000 and is usually discovered in 7-12 months. Additionally, the median loss in the

government sector was $150,000. [1] Her theft was nothing short of spectacular.
In 2011 Dixon budgeted $20 million for capital projects such as improvements to roads, sewer

systems and the like but also budgeted that they would pay for it by borrowing that same $20

million. [2] Of course, loans must be repaid over time, with interest, from taxpayer money. As

the film unfolds, we learn that Crundwell funneled all her fraud through the capital projects fund

and that she stole more than $5 million in 2011 alone. A quarter of that money went to fund her

lavish lifestyle rather than to take care of much needed repairs and improvements around Dixon.

Pope begins by offering a description of Dixon, the hometown of Ronald Reagan, who famously

coined the phrase ‘trust but verify”. It is small town America, with white picket fences, the kind

of place where everyone knows everyone else.

The film first focuses on a member of staff, Kathe Swanson, who called the City’s bank in April

2012 and asked for the bank statements for all the City’s accounts so that she could prepare the

monthly reports, instead of calling and asking for specific statements as she usually did, and as
she had been instructed to do by Crundwell. When she received them, included was a statement

for an account she had never seen before. And thus began the unravelling of this enormous

crime. After Swanson showed the statement to the mayor, James Burke, he called the FBI in

Chicago. The investigation continued for six long months, while Burke and Swanson carried on

as usual and tried to treat Crundwell normally. Pope’s interviews with Swanson are highly

effective at showing the strain the investigation placed on Swanson.

The fraud was straightforward, and Pope uses simple graphics to explain how it worked. Having

opened a bank account in the City’s name that only Crundwell had access to, she created fake

invoices. She approved the invoices for payment, wrote checks to pay those invoices, deposited

them in the secret account and then had all that money to spend. And spend she did. She spent

money on luxuries for herself, a house in Florida, but she mainly spent the money on quarter

horses and her amazingly successful horse business.

The film describes the effect on the people around her. Not just other employees but the citizens

of this small town. The prevailing sentiment was that Rita was a nice woman, and everyone

trusted her. Pope goes on to examine why her extravagant lifestyle didn’t raise red flags.

Different people had different explanations – family inheritance, a dead wealthy boyfriend,

success with her horse business and so on. Maybe more about the horses
So why did City officials not figure this out? One of the shocking revelations in the film is that

officials from a similar sized neighboring city got in touch with a Dixon city council member to

ask why Dixon had such big deficits, while that city had surpluses. But nothing was done. They

trusted Crundwell. Pope again uses simple graphics to show how the budget deficits affected the

City – cuts to emergency services and police, the layoff of employees, and so on. She also shows

what Crundwell was spending money on at that time – horses, luxury motor coaches including

one that cost an outrageous $2.1 million while the City struggled. Need more here about the

effect on citizens. potholes, infrastructure etc

After her arrest, the FBI seized 400 horses, properties and ranchland, horse trailers, RVs, and all

kinds of horse paraphernalia. Eventually, $10.5 million was recovered from the sale of her assets,

she was sentenced to almost 20 years in prison and ordered to pay $100 million in restitution.

The film then turns to who was to blame for the fraud - the City council, the auditors, the bank,

the taxpayers? The citizens blamed the City council, who in turn blamed the auditors and the

bank. Astonishingly, City councilors did not accept any personal responsibility at all. Pope paints

a damming picture against the auditors who violated many professional standards and ultimately

paid Dixon more than $35 million in compensation. The bank settled for almost $4 million for

their part in not questioning the secret account and the monies that went in and out of it.

Pope tries to explain some fundamental concepts of accounting and fraud prevention and tries to

do it is a way that is accessible to people who might not be familiar with terms like “segregation

of duties” and “internal controls.” She again uses straightforward graphics and metaphors to

explain these issues and what the role of an auditor is. She uses sketches to personalize people

being deposed, the kind we often see from courtrooms when cameras are not allowed, and she

highlights some of the damming statements made by the auditors and bankers.
Pope also discusses the form of government that was in place when Crundwell worked at Dixon

and why the citizens voted for a new, more common form, which might offer greater protection

against such crimes. They also voted out the entire council and elected a new mayor.

Pope does a good job throughout in making the film interesting for different audiences, both the

public and accountants and auditors alike. The graphics she uses are easy for laypersons to

understand but not so dumbed down that professionals will be turned off by them. The scenes of

Crundwell and her horses are compelling, as are the images of small-town America and the scale

of the fraud. Unfortunately, but unsurprisingly, neither Crundwell nor the auditors were willing

to be interviewed for the film, which leaves us with some unanswered questions.

Audiences of all types tend to find crime of any sort interesting – just look at the success of Law

and Order over the last three decades. But television crime is usually simple – someone shoots

someone else, or a spy steals some secrets, and it can all be wrapped up in an hour. Fraud,

however, is often complex. And while accountants may be fascinated by the details of how the

fraud was committed, arguably general audiences might only interested be in the personal details

– how much did they get away with, how did they get caught, did the fraudster have a drug or

gambling problem? Pope straddles a difficult line in the second half of the film where she tries to

educate the audience on the roles various people play in fraud prevention. In my opinion, she

does a fine job in making this understandable and helps to dispel the common misconception that

auditors are primarily responsible for fraud detection. Richard Roeper of the Chicago Sun Times

gave it 3.5 stars (out of 4) and gave “kudos to director Kelly Richmond Pope for applying just

the right mix of “What the Heck” whimsy and respectful, serious reporting...” to the story.

But another reviewer, Lisa Trifone of Third Coast Review, [3] an online magazine specializing in

all things Chicago, did not share Roeper’s glowing assessment. She believes the second part of
the film is more suited for classrooms than movie theatres, and that only “numbers” people will

appreciate it. And right there, Trifone personifies one of the points that Pope is trying to make.

We all have some responsibility to understand finances and how people spend our money. We

can’t rely only on “numbers” people; they are the people with the expertise to commit fraud. The

city council of Dixon was responsible for oversight of the budget, and they failed miserably in

their duty. Does Trifone really think that the details, the how, of this crime matter only to

“numbers people”? The irony, of course, is that the good citizen members of that council left all

the financial details to their “numbers person” Rita Crundwell and look how well that turned out.

The film discusses how Crundwell obfuscated the details of the city’s funds and made them

appear too complicated to understand. We don’t have to start by examining the budget of the City

of Chicago, but we should all start somewhere. Hopefully, people watching this film, people like

you and me and the citizens of towns everywhere can look at this film and start to wonder - is the

money I give to the PTA in good hands? How do I know that the soccer mom looking after the

uniform fund isn’t spending it on her credit card bill instead? It is human nature to trust the

people we know but ironically, we can only be taken advantage of by people we trust. The big

lesson from this film is “trust but verify”. I hope people watch this film and take its message to

heart.

Works Cited

[1] https://acfepublic.s3.us-west-2.amazonaws.com/2022+Report+to+the+Nations.pdf
page 32
[2] City of Dixon Budget 2010-2011 page 38

[3]. Trifone, Lisa. Film Review: All the Queen’s Horses Has the Who and How but Lacks the

Why. Third Coast Review November 9, 2017