Ortgiesens Turnover Motion-redact

8/10/2019 Ortgiesens Turnover Motion-redact

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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF ILLINOIS

WESTERN DIVISION

UNITED STATES OF AMERICA,

Petitioner,

v.

RITA CRUNDWELL.

Defendant,and

SHAWN ORTGIESEN AND ANGELAORTGIESEN,

Third-Party Citation Respondents.

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Case No. 12 CR 50027

Judge Philip G. Reinhard

UNITED STATES PETITION FOR RELIEFAGAINST 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

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


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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) (citing26 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-visother 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 $181,690with 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 andAngela Ortgiesen, jointly and severally, in the amount of $181,690plus 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. FARDONUnited States Attorney

By: /s Joseph A. StewartJOSEPH A. STEWARTAssistant United States Attorney



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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 byfirst-class mail on December 10, 2014, to the following non-ECF filers:

Shawn Ortgiesen Angela Ortgiesen

Rita CrundwellBOP #44540-424FCI Waseca

P.O. Box 17311000 University Drive S.W.Waseca, MN 56093-0741

s/ Joseph A. StewartJOSEPH A. STEWARTAssistant United States Attorney



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LOAN SUMMARY ASSUMPTIONS

12/9/2014

LOAN SUMMARY

Total payments $23,458.45

Total interest payments $2,829.97

Total principal payments $20 628.48

Total unpaid interest $17,149.86

Total unpaid principal $162,233.64

Total unpaid loans $179,383.50

Interest from 8/1 forward to todays date $2,307.32

Total unpaid balance as of today s date $181,690.83

Interest per diem $18.03

Total Ortgiesen Loans $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 2,650.00

per documentation provided 2,422.50

by Shawn

dated 8/1/2014 23,458.45

EXHIBIT A


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Ortgiesens Turnover Motion-redact