Accounting firm fined $35 million for oversight failure in embezzlement scam - Bring Me The News

Accounting firm fined $35 million for oversight failure in embezzlement scam

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A Minnesota accounting firm will pay a $35.15 million fine for not detecting an embezzlement scheme run by the former comptroller of an Illinois city.

The Pioneer Press reports that the firm, CliftonLarsonAllen served as the auditor for the city of Dixon, Ill, overseeing bookkeeping and payroll.

Dixon's comptroller, Rita Crundwell, 60, was arrested last year. The charges against her say she stole $54 million over 22 years, siphoning city funds into fraudulent accounts that she controlled. The Star Tribune reports that the city said CliftonLarsonAllen let millions of dollars leave city coffers without adequate oversight and standard accounting tests.

“It’s shocking. It’s negligence,” said Devon Bruce, the attorney for the city.

Terms of a lawsuit settlement were negotiated over the weekend by attorneys for the city and CliftonLarsonAllen as well as another accounting firm and a bank.

When she was arrested, federal authorities said Crundwell had used the money "to finance her own lavish lifestyle, including operating a horse farm." She is serving a prison term of almost 20 years at the federal facility in Waseca, Minn., after a guilty plea to one count of wire fraud

Regarding the CliftonLarsonAllen fine, Dixon Mayor Jim Burke said, "The size of the settlement kind of speaks for itself."

CliftonLarsonAllen employs 3,600 professionals, including more than 1,500 CPAs. The firm has offices in 14 Minnesota cities.

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