DETROIT (WWJ) — Former Detroit Riverfront Conservancy CFO William Smith has pleaded guilty to stealing millions of dollars from the organization and spending it on a lavish lifestyle for himself and his family.
Smith pleaded guilty to one count of wire fraud and one count of money laundering, both of which carry a maximum term of 20 years in prison.
Smith was fired from the conservancy in late May in connection with the scheme that dates back to at least November 2012 and ran until this May. Authorities say Smith embezzled money that was supposed to be used to beautify the Detroit Riverfront and instead spent it on jewelry, plane tickets, limousines and other luxury expenses, including massive credit card bills.
Authorities say Smith embezzled more than $40 million from the Conservancy, though the exact financial losses from his scheme are “difficult to quantify with precision.” The Conservancy is funded by both private donors and public grants.
Under the plea deal, Smith has agreed to pay no less than $44.3 million. The U.S. Attorney’s office said sentencing guidelines call for between 15 and 19.5 years in prison, though Smith’s attorneys have reportedly disagreed with that, according to the Detroit Free Press.
“The scale and scope of it is, quite frankly, astonishing,” US Attorney Dawn Ison told reporters Friday. “Mr. Smith used (the embezzled money) for his own personal gain, for his own real estate interests, for his personal businesses, but a large portion of it was just used to live a very lavish lifestyle.”
Court documents show Smith’s scheme took three principal forms:
Firstly, he diverted funds from the non-profit’s bank accounts to a bank account in the name of “The Joseph Group, an entity he owned and controlled. The Joseph Group was not an approved vendor for the Conservancy and provided no goods or services to the organization.
Between February 2013 and this May authorities say Smith transferred about $24.4 million from the conservancy’s accounts to the Joseph Group account.
Secondly, Smith maintained an American Express account in the name of another of the many entities he owned and controlled, this one called “William Smith & Associates LLC.” There were four American Express credit cards issued on this account.
Between November 2012 and May 2024, Smith used approximately $14.9 million in Conservancy funds to pay off purchases made on this account. None of these expenditures were authorized by the Conservancy, which maintained other credit card accounts for Conservancy purchases. Smith used the American Express account to purchase furniture, designer clothing, handbags, lawn care services, airline tickets, and other consumer goods and services for himself and his family.
Lastly, Smith also used Conservancy funds to purchase cashier’s checks from various financial institutions. These cashier check purchases were unauthorized, and Smith used the cashier’s checks for his own purposes without the knowledge or approval of the Conservancy’s Board of Directors.
Smith engaged in various practices to cover up and sustain this massive fraud scheme. In some instances, Smith falsified bank statements that he provided to the Conservancy’s bookkeeper, altering or deleting unauthorized transfers on the statements in order to keep them off of the Conservancy’s books.
Smith is set to be officially sentenced next March.
More on today's top stories: