DETROIT (WWJ) — Federal charges have been filed against William Smith, the former CFO of the Detroit Riverfront Conservancy.
Smith, 51, has been charged with bank fraud and wire fraud in a criminal complaint unsealed Wednesday in federal court. The charges stem from an alleged years-long scheme by Smith to embezzle what amounted to nearly $40 million from the conservancy for his own personal use.
Appearing in federal court in Detroit Wednesday afternoon, Smith was released on a $10,000 unsecured bond and was ordered to turn in his passport and enhanced driver's license. He cannot travel outside the Eastern District of Michigan. Prosecutors had asked for Smith to be placed on a tether, but Judge Steven Whelan denied that request.
The Detroit Riverfront Conservancy — a non-profit organization formed with the mission of “developing access to the Detroit International Riverfront from the Ambassador Bridge to Belle Isle” — is funded by a combination of public and private funds, according to U.S. Attorney Dawn Ison’s Office.
Smith served as the DRFC’s CFO from 2011 until he was fired in late May. Ison’s office says Smith’s alleged scheme dates back to as early as November 2012.
The complaint claims Smith “carried out his embezzlement in two distinct ways.” First, he allegedly used conservancy funds to pay for charges that he and his family accrued on a personal American Express credit card.
Secondly, Ison’s office says Smith diverted DRFC funds to a company he controlled called “The Joseph Group.”
Neither set of expenditures was authorized or approved by the Board of the DRFC, according to the attorney’s office.
“‘The Joseph Group,’ was not an approved vendor and provided no services to the DRFC, and Smith had no authority to use Conservancy funds to pay his own personal credit card bills,” Ison’s office said.
Using those two alleged embezzlement streams, Smith stole nearly $40 million between November 2012 and March 2024.
To cover up his embezzlement, Smith allegedly doctored bank statements provided to the Conservancy’s accountant for entry into the DRFC’s accounting software. The false bank statements led to “erroneous financial information being entered into the DRFC’s books, thereby concealing the fraud,” Ison’s office said.
In 2023, Smith is alleged to have obtained a $5 million line of credit with Citizens Bank on the Conservancy’s behalf – a line of credit he was “not in any way authorized to take out.” The Bank asked Smith for documentation confirming that Smith, as CFO, had the sole authority to obtain such a line of credit on behalf of the Conservancy.
Smith is alleged to have provided the bank with a document purporting to establish that Smith was indeed empowered by the DRFC Board of Directors to obtain such credit lines. That document, according to the complaint, was false, and bore the forged signature of the Conservancy’s Corporation Secretary.
Investigators are still looking into the case and could charge any others found to be connected to the scheme.
“My office is committed to pursuing anyone, regardless of their title, who fleeces taxpayers and charitable donors for their own private gain,” Ison said, per a press release.
The case was initially brought to Wayne County Prosecutor Kym Worthy’s office on May 14, and the prosecutor said after discovering a “federal nexus” and the “enormous amount of money” that was allegedly embezzled, she called Ison’s office.
“We commend the FBI and U.S. Attorney’s Office for the quick and thorough start to their investigation, which led today to the arrest of William Smith. We will continue to cooperate with law enforcement to ensure justice is brought against this nefarious scheme to subvert layers of financial controls and embezzle resources from one of the greatest waterfront projects in the United States," said Matt Cullen, Chairman of the Board, Detroit Riverfront Conservancy.