DIXON – The city of Dixon is citing a deposition by a former branch manager in its lawsuit against the bank, where former city Comptroller Rita Crundwell had a secret account that she used in her theft of nearly $54 million.
The former city bookkeeper was sentenced in February to nearly 20 years in federal prison after pleading guilty to wire fraud. Crundwell stole the money from Dixon over 22 years, using it to support a lavish lifestyle and a renowned horse-breeding operation.
The city’s lawsuit blames Fifth Third Bank and its auditors and seeks $53 million in damages.
The deposition by former Fifth Third Bank branch manager Amanda Powers acknowledges the bank failed to follow reasonable commercial banking standards in its handling of the account, according to a report Saturday in The (Dixon) Telegraph.
Powers said in her deposition that the bank cashed unendorsed checks from Crundwell, cashed checks made payable to “treasurer” without further inquiry and allowed Crundwell’s secret personal account to be opened as a city account without proper verification.
The bank is seeking to be removed from the lawsuit because it said Dixon is barred from taking legal action against it by the Illinois Fiduciary Obligations Act, which shields banks from liability for an account holder’s dishonest finances – but only if the bank’s dealings are in “good faith.”
The city of Dixon argues the deposition shows the bank was negligent and therefore responsible, the newspaper reported.
Fifth Third said the city itself was negligent in failing to detect the theft, which only came to light when a colleague filling in for a vacationing Crundwell became suspicious. It also said it does not owe the city any money because the bank no longer has any of the city’s funds that “in equity and good conscience should be returned.”
Federal authorities have been selling off Crundwell’s seized assets in an attempt to return at least some money to the city. They said they’ve sold the last of her tangible assets, including homes, jewelry, furniture and horses.
The Telegraph reported that the most recent and final asset sale was of three vehicles, which raised $35,900. All told, her assets brought in more than $10 million.