ROCKFORD, Ill. — Hundreds of horses. Multiple houses. A $2.1 million luxury motor home. In hindsight, they all pointed to the unfathomable: Rita A. Crundwell, while comptroller of a small town two hours west of Chicago, had raided public coffers for decades to pay for a lavish life and a horse-breeding business.

Ms. Crundwell, 59, pleaded guilty in federal court here on Wednesday to one count of wire fraud, after bilking $53 million from her hometown, Dixon, Ill. By then, Dixon was known by outsiders not only as the proud boyhood home of President Ronald Reagan, but also as home to what one federal official called “one of most significant abuses of public trust ever seen in Illinois.”

That is quite a distinction considering the state’s reputation for corrupt officials, including governors. Still, officials said, the continuing tale in Dixon comes as a harsh reminder about the potential for large crimes in small city governments, where oversight can sometimes be an afterthought.

“For over 20 years, Rita Crundwell was living the dream,” William C. Monroe, the F.B.I. agent in charge of the case, said at a news conference after the court hearing. “Unfortunately, this dream was being funded by the taxpayers of the city of Dixon.”