Professor Elam

Tuesday Sept 11 2012

This story broke this summer as investigators charged Rita Crundwell with embezzling millions from the small town of Dixon IL. She spent her life working there and rose to Comptroller. The theft was discovered as is usually the case, when Riat was on vacation and another colleague examined the records. 

It is near impossible to make any money in the horse business. It usually requires owning lots of horses and only a handful or one or two are likely to be winners. Even then there is little to no money in showing horses, just tropies, see photo at left. Still Rita was able to tout her success in such a manner that all beleived this was a winning horse business that supported itself. The current estimate is a cost of $200,000 to simply feed and house all her animals. Click on the photo to get an idea of just how fabulous this hoax had become. 

Internal control is a system of checks and balances to insure that business takes place in a safe well guarded manner. One tenet of IC is required vacations. Typically frauds like this are uncovered when someone else comes in to check the books. Often the fraudster will have come in to work in an ambulance if necessary over the years to cover the embezzlement. 

As with Bernie Madoff, an observer has to wonder how he or Rita thought the hoax would last forever. And insterestingly apparently they convinced themselves. After all they were right here waiting to be arrested when the deals blew up. I suspect 59 year old Rita is facing a long time in jail. 

At the end of our lives all we have is our reputation.