Case: 3:12-cr-50027 Document #: 198 Filed: 12/10/14 Page 1 of 8 PageID #:1186

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS
WESTERN DIVISION
UNITED STATES OF AMERICA,

)
)
)
Petitioner,
)
)
v.
)
)
RITA CRUNDWELL.
)
)
Defendant,
)
and
)
SHAWN ORTGIESEN AND ANGELA )
)
ORTGIESEN,
)
)
Third-Party Citation Respondents.

Case No. 12 CR 50027

Judge Philip G. Reinhard

UNITED STATES PETITION FOR RELIEF

AGAINST SHAWN AND ANGELA ORTGIESEN
The United States, by Zachary T. Fardon, United States Attorney for the Northern
District of Illinois, petitions this Court for relief against respondents Shawn Ortgiesen and Angela
Ortgiesen to assist its enforcement of the judgment entered against Rita Crundwell in the captioned
matter. The United States seeks a judgment against the Ortgiesens based on several defaulted
loans defendant made to respondents. In further support of its petition, the government states:
PARTIES
1.

Petitioner is the judgment creditor, the United States of America.

2.

Defendant Rita Crundwell pled guilty to one count of wire fraud (18 U.S.C. ' 1343)

and thereafter this Court sentenced her to a term of incarceration and to pay $53,740,394 in
restitution to her victim.
3.

Third-party citation respondents Shawn Ortgiesen and Angela Ortgiesen are

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married and residents of the Northern District of Illinois. The Ortgiesens owe Crundwell money.
JURISDICTION
Subject Matter
4.

The district court had subject matter jurisdiction over the underlying criminal case

against Rita Crundwell which among other things established her criminal restitution liability
under 18 U.S.C. 3231 (providing original jurisdiction . . . of all offenses against the laws of
the United States). The district court has jurisdiction over the supplementary proceedings under
28 U.S.C. 1331, 1345 (federal question jurisdiction and United States as plaintiff) and 18
U.S.C. 3612(c) (authorizing the United States to enforce restitution orders). Pursuant to 18
U.S.C. 3613(a), (f) & 3664(m) (1) (A) (i), the United States may enforce a restitution judgment
according to the practices and procedures for enforcing civil judgments under federal law.
Personal
5.

The Court has personal jurisdiction over respondents in this post-judgment

enforcement proceeding based on third-party citations to discover assets served on each of them
pursuant to Fed. R. Civ. P. 69. Doc. Nos. 144 and 169 (proofs of service). Rule 69 incorporates
into federal law state post-judgment enforcement procedures. The incorporated state procedures
in this district are ' 2-1402 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1402) and
Illinois Supreme Court Rule 277, the state statutes and rules governing supplementary procedures.
6.

On June 11, 2013, Shawn Ortgiesen appeared personally at the offices of the United

States Attorney for examination by counsel for the United States pursuant to a third-party citation
to discover assets. At that time, he stipulated to the fact that he had borrowed money from Rita
Crundwell and that a substantial portion of it remains unpaid. Having personally appeared and
answered respondent has accordingly submitted to the jurisdiction of the court.
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7.

On August 28, 2014, Angela Ortgiesen appeared personally at the offices of the

United States Attorney for examination by counsel for the United States pursuant to the third-party
citation to discover assets. At that time, she stipulated to the fact that she had borrowed money
from Rita Crundwell and that a substantial portion of it remains unpaid. Having personally
appeared and answered respondent has accordingly submitted to the jurisdiction of the court.
BACKGROUND
The Criminal Judgment and Lien
8.

In May 2012, an indictment was returned in the captioned criminal case against

Rita Crundwell charging her with a massive wire fraud scheme.

The indictment charged that the

City of Dixon, Illinois employed defendant as its comptroller. As comptroller, she supervised the
City of Dixons finances, and from 1990 through April 2012, defendant used her position as
comptroller to embezzle about $53.7 million. The defendant pleaded guilty to the charges
pursuant to a written plea agreement.
9.

On February 14, 2013 this Court sentenced Crundwell to 235 months in prison.

The Court further ordered her to pay restitution in the amount of $53,740,394 to the city of Dixon
(D.E. No. 70). She is currently incarcerated in Waseca, MN.
10.

Upon entry of judgment a lien arises on a defendants property and rights to

property and that judgment lien binds his property as if it were a federal tax lien. 18 U.S.C.
3613(c); United States v. Hosking, 567 F.3d 329 (7th Cir.2009) (property the IRS can reach to
satisfy a tax lien, a sentencing court can also reach). Unlike an ordinary judgment lien which
when recorded simply binds real property, a 3613 judgment lien extends to both real and
personal property. United States v. Swan, 467 F.3d 655, 656 (7th Cir.2006) (citing 26 U.S.C.
6321; applying tax lien principles to a 3613 judgment). The judgment lien is entitled to priority
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vis-a-vis other lien creditors when properly recorded. 18 U.S.C. 3613(d).

11.

In this case, the government recorded its notice of lien against the defendants

property and rights to property on March 7, 2013 (notice of lien recorded in the Rock County, WI
Register of Deeds Office as document number E 1972564) and on March 15, 2013 (notice of lien
recorded in the Lee County, IL Clerk & Recorders Office as document number 2013001434).
The Citation Proceedings
12.

On May 16, 2013, the United States served a citation to discover assets on Shawn

Ortgiesen.
13.

Pursuant to the citation, on June 11, 2013 Shawn appeared personally at the offices

of the United States Attorney to be examined under oath as to the assets of Rita Crundwell. He
appeared again on July 16, 2014.
14.

At the citation examination, Shawn responded to questions regarding the financial

transactions between him and Rita Crundwell and in substance stated that: beginning in about
November 2008 and continuing through January 2012 he and his wife, Angela, obtained a series of
loans from Rita Crundwell totaling $182,862 with and interest rate of 4%. Some of the loans
were documented with a promissory note and all the loans were evidenced by a cancelled check for
Crundwell to one or both of the Ortgiesens. The notes and instruments evidencing the loans were
made exhibits and verified by the respondent. Shawn further stated that the loans are all in
default.

15.

On August 11, 2014, the United States served a citation to discover assets on

Angela Ortgiesen.
16.

Pursuant to the citation, on August 28, 2014 Angela appeared personally at the

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offices of the United States Attorney to be examined under oath as to the assets of Rita Crundwell.
At the citation examination, Angela endorsed Shawns testimony as to the loans Crundwell made
and the amounts owed.
17.

The government prepared a summary of the loans defendant made to the Ortgiesens

which is attached as Exhibit A.

The summary details the total principal amount, loaned

incrementally over time, of $182,862, payments and credits of $23,458, and the resulting balance
due of $181,690 with interest accruing after December 9, 2014 at a rate of $18.17 per day.
COUNTS FOR RELIEF
Rules and Procedure
18.

Proceedings to enforce fines and restitution are excluded from the Federal Rules of

Criminal Procedure and are thus conducted under the Federal Rules of Civil Procedure. Fed. R.
Crim. P. 1(a) (5) (C) and 18 U.S.C. 3613(a) & (f).
19.

District courts may entertain civil, postjudgment supplementary proceedings

within an underlying criminal case in order to enable government to collect restitution. United
States v. Kollintzas, 501 F.3d 796, 80203 (7th Cir.2007).
20.

In supplementary proceedings a trial court may enter judgment against a third party

if the record contains some evidence that the third party possesses assets of the judgment debtor.
Pyshos v. Heart-Land Development Co., 630 N.E.2d 1054 (Ill. App. 1994); Lange v. Misch, 598
N.E.2d 412 (Ill. App. 1992) and O'Connell v. Pharmaco, Inc., 493 N.E.2d 1175 (Ill. App. 1986).
COUNT I
The United States realleges and incorporates by reference paragraphs one (1) through
twenty (20) above as paragraphs one (1) through twenty (20) of this Count I.
21.

The governments 3613 judgment lien attached to the debts owed by the
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Ortgiesens to Crundwell as represented by the defaulted loans.

22.

The government seeks a judgment on the defaulted loans the Ortgiesens owe to

Crundwell so that it may enforce the resulting judgment debt, by execution or otherwise, and apply
whatever money is recovered to the restitution judgment entered in the captioned criminal matter
against Crundwell.
Wherefore, the United States requests this Court to:
a) Find the facts in favor of the United States and against Shawn and Angela Ortgiesen;
b) Enter judgment in favor of the United States and against the respondents, Shawn and
Angela Ortgiesen, jointly and severally, in the amount of $181,690 plus prejudgment
interest of $18.17 per day from December 10, 2014 through the date of judgment; and
c) Grant any other relief the circumstances may require.
Respectfully submitted,
ZACHARY T. FARDON
United States Attorney

By: /s Joseph A. Stewart

JOSEPH A. STEWART
Assistant United States Attorney

Case: 3:12-cr-50027 Document #: 198 Filed: 12/10/14 Page 7 of 8 PageID #:1192

CERTIFICATE OF SERVICE
The undersigned Assistant United States Attorney hereby certifies that in accordance with FED. R.
CIV. P. 5, LR5.5, and the General Order on Electronic Case Filing (ECF), the following document:

United States Petition for Relief Against Shawn and Angela Ortgiesen

was served pursuant to the district courts ECF system as to ECF filers, if any, and were sent by
first-class mail on December 10, 2014, to the following non-ECF filers:
Shawn Ortgiesen

Angela Ortgiesen

Rita Crundwell
BOP #44540-424
FCI Waseca
P.O. Box 1731
1000 University Drive S.W.
Waseca, MN 56093-0741

s/ Joseph A. Stewart
JOSEPH A. STEWART
Assistant United States Attorney

Case: 3:12-cr-50027 Document #: 198 Filed: 12/10/14 Page 8 of 8 PageID #:1193

LOAN SUMMARY & ASSUMPTIONS
12/9/2014

LOAN SUMMARY
Total payments
Total interest payments
Total principal payments
Total unpaid interest

$23,458.45
$2,829.97
$20 628.48
$17,149.86

Total unpaid principal

$162,233.64

Total unpaid loans

$179,383.50

Interest from 8/1 forward to today s date

$2,307.32

Total unpaid balance as of today s date

$181,690.83

Interest per diem

Total Ortgiesen Loans

$18.03
$182,862.12

ASSUMPTIONS
1) Payments applied first to accrued interest and then to the outstanding loan balance
2) Assumed 4% interest on all loans
3) Interest accrued to 6/11/2013, date of appearance pursuant to citation
4) Assumed date of loan # 9 was 12/15/2009 - No promissory note provided
5) Assumed request for $10,865 on 12/7/2011 was denied by Rita Crundwell
6) Payments for loans # 1-7 applied as follows:

Loan #1
Loan #1
Loan #1
Loan #1 & 2
Loan #1 & 2 - 2 pay
Loan # 1, 2, & 3
Loan # 1, 2, & 3
Loan # 1, 2, & 3
Loan # 1, 2, & 3
Loan # 1, 2, & 3
Loan # 1, 2, & 3
Loan # 5
Loan # 5
Loan # 6
Loan #10
Loan #10
Loan #10

Additional payments
per documentation provided

2,650.00
2,422.50

by Shawn
dated 8/1/2014

23,458.45

EXHIBIT A