The Corruption Of The Fraud

1900 Words Feb 14th, 2016 8 Pages
Background

Dixon, Illinois is a small town of about 16,000 people (US Census, 2015) located approximately 100 miles southwest of Chicago. Until 2012, Dixon’s claim to fame was being the town where, 40th President of the United States of America, Ronald Reagan grew up (City of Dixon). Today, in addition to hosting a future president for 22 years (City of Dixon), Dixon, IL is known as the location of the largest and longest municipal fraud in United States history (Mathieson, 2014). This paper will examine the main players in the fraud; how the fraud was carried out; the laws and procedures violated; the impact of the fraud; and the measures that could have been taken to prevent it. The Fraud Issue

This issue at hand in this case is one of embezzlement (Hancox, 2014). In December of 1990 the Treasurer/Comptroller of Dixon, IL, Rita Crundwell, opened up a fake capital account in the city’s name. This allowed her to take city money, deposit it in this account, and withdraw it in her name. For 22 years Rita Crundwell fooled the city of Dixon, the mayor, the City Council, the State of Illinois, and the tenth largest public accounting firm in the United States (Inside Public Accounting , 2015).
Drilling down even further, this is a classic billing scheme. According to (Wells, 2013, p. 96), a billing scheme is defined as “A scheme in which the fraudster causes the victim organization to issue a fraudulent payment by submitting invoices for fictitious goods or services…” As we…
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