Police say Rita Crundwell, 58, had been draining Dixon's bank accounts since 2006.
Crundwell allegedly funneled more than $30 million into an account she controlled and spent it on expensive jewelry, vehicles and her horse breeding business. Dixon's yearly budget is only about $9 million. When the city became strapped for cash, Crundwell allegedly blamed it on late payments from the state.
Dixon's mayor says independent audits of city finances didn't uncover any problems. But when Crundwell was on vacation last fall, the city worker filling in for her found suspicious transactions. The mayor notified the FBI.
Crundwell is in jail, charged with one count of wire fraud. The city doesn't know if it will be able to recover any of the money.