On Valentine’s Day, Rita Crundwell will be sentenced for her role in the largest municipal fraud in U.S. history.
Once known as one of the leading American quarter horse breeders, Crundwell embezzled more than $53 million from the town of Dixon, Illinois, which has a population of 16,000 and an annual budget between $6 and $8 million. Crundwell, who was Dixon’s comptroller, carried on her scheme for 20 years, but it was discovered only when a Dixon city clerk opened a letter revealing that Crundwell had set up a secret bank account and was embezzling city monies to finance her lavish lifestyle.
While Dixon was cutting jobs, battling a budget deficit, and struggling to complete capital improvement projects, Crundwell was throwing epic birthday parties, building ranches and traveling the world. According to court records, she stole an average of more than $37,000 for every day she worked for Dixon.
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Some people are shocked to hear that a woman was at the center of such a vast scheme, but women in fact tend to be pretty savvy embezzlers. In fact, with more women taking on leadership positions in corporate America, an unexpected phenomenon has begun to emerge: pink-collar crime.
It’s never been a popular topic. In 1975 Rutgers criminologist Freda Adler wrote a groundbreaking yet controversial book, Sisters in Crime: The Rise of the New Female Criminal, that shed light on research analyzing the criminality of women. But in the era of the Equal Rights Amendment, Adler took a ton of heat, as critics believed her book undermined the feminist movement and distorted the facts about the female crime rate. But was Adler wrong? I would argue she wasn’t.
Pink-collar crime is unquestionably on the ascent. The term generally refers to the rise of women involved in white-collar crime, but it’s also a theory introduced by criminology professor Kathleen Daly during the 1980s to describe the types of embezzlement crimes typically committed by females. Based on my research as a forensic accountant and fraud investigator, I’ve watched this trend swell over the years.
While perhaps no pink-collar crime has been as scandalous as Crundwell’s, she is far from alone. In fact, according to the 2011 Marquet Report on Embezzlement, women are more likely to embezzle than men. Based on a review of 473 major embezzlement cases in the United States in 2011 alone, nearly two thirds of the cases involved female perpetrators. Among the top 10 cases, five involved “pink-collar criminals” who pocketed anywhere from $4.8 to $16 million.
Before Crundwell, the largest municipal fraud was also an embezzlement case committed by a woman named Harriette Walters. Walters was convicted of embezzling $48 million over 20 years in her role as a tax-assessment manager for the District of Columbia. She is currently serving a 16 1/2-year sentence in a West Virginia federal prison.
So why is women’s stealing on the rise? To help answer this question, I spoke with Kelly Paxton, a licensed private investigator and president of Denver-based Financial Caseworks LLC. Paxton told me that the increase is due to both greater “perceived needs,” such as material goods, as well as more women being in positions where they have access to funds.
That observation is supported by my conversation with Diann Cattani, whom I interviewed for my documentary “Crossing the Line: Ordinary People Committing Extraordinary Crimes.” Cattani, who served 18 months in prison for stealing $500,000, felt the need to provide more material possessions for her family in hopes that it would mend some personal issues within her marriage. But the stigma of being a convicted felon ended up destroying her marriage, and continues to challenge both her personal and professional lives.
Maintaining a lavish lifestyle is a commonly cited rationale for committing white- or pink-collar crimes. For Crundwell, it appeared to be her top priority. According to court documents, Crundwell first embezzled $181,000 in 1991, which she used to purchase a Suncruiser Pontoon boat and $3,000 worth of diamonds. The theft continued in 1992, when she pocketed $121,000, more than two thirds of which she used to pay off her credit card. In 1999 Crundwell pocketed more than $1 million, using $125,000 to purchase a horse. Even as the recession set in, Crundwell continued to use Dixon as her personal piggy bank, embezzling millions of dollars more.
So how did she pull it off for so long? According to court documents, Crundwell used a common method—fake invoices. The Marquet study showed that the most common embezzlement scheme involved the issuance of forged checks or unauthorized checks. In her two-decade scheme, Crundwell created 179 fake invoices. Her position as city comptroller made it easy for her to mask the fraud, and was another factor that Crundwell had in common with the majority of embezzlers: nearly three quarters of embezzlers studied by the Marquet researchers were employees who held finance/bookkeeping and accounting positions.
In 1990 Freda Adler told the Wall Street Journal, "as more women are out in the mainstream, the more mainstream activities they are going to be involved in."
We can only imagine what she would have to say about Rita Crundwell.
