Final answer:
The Crundwell case involved legal action against the City of Dixon, auditors CliftonLarsonAllen LLP, Janis Card Associates LLC, and Fifth Third Bank after Rita Crundwell embezzled approximately $53 million. The entities were involved due to their alleged negligence and the settlement resulted in compensation for the city. The complex case highlighted the importance of proper oversight and due diligence in financial management.
Step-by-step explanation:
In the case involving Rita Crundwell, legal action was filed against several entities including the City of Dixon, its auditors CliftonLarsonAllen LLP, Janis Card Associates LLC, and the bank Fifth Third Bank. Rita Crundwell was the comptroller and treasurer of Dixon, Illinois, and she embezzled approximately $53 million from city funds over a period of two decades. The legal action pertained to one of the largest municipal frauds in American history. The case was significant due to the sheer amount of money stolen and the length of time over which the fraud occurred. Despite regular audits, the fraudulent activity went unnoticed, which contributed to the involvement of the auditing firms and the bank in the legal dispute. This led to a settlement in which the City of Dixon received millions in compensation.
Each entity played a role in the legal dispute due to their alleged negligence in identifying and reporting the fraudulent activities. Crundwell's falsification of reports and unauthorized transfers of public funds remained undetected partly due to failures in compliance and auditing standards by the responsible entities. Hence, the auditors and the bank were accused of failing to carry out proper oversight and due diligence, which should have uncovered the embezzlement.