DETROIT (WWJ) -- It appears that a plea deal for the embattled former CFO of the Detroit Riverfront Conservancy has fallen through, or is at least on hold for the time being.
William Smith, charged with wire fraud and money laundering for allegedly embezzling early $40 million from the nonprofit organization, was supposed to enter a guilty plea in the case on Monday.
But he didn't, WWJ Newsradio 950's Tim Pamplin reports.
"This was meant to be quite a perfunctory standard hearing; the plea deal fell apart when the matter of restitution arose," Pamplin reported from the federal courthouse in Detroit.
Pamplin said U.S. District Judge Susan DeClercq asked Smith the standard questions: whether he understood what he was doing in regards to pleading guilty, and what that would mean to him down the road.
Smith answered all of the judge's questions as expected.
However, about an hour into the hearing — about the time when Smith would officially enter his plea — Pamplin said things took a dramatic turn.
The U.S. Attorney's Office brought up the matter of $44.3 million of restitution to the riverfront needing to be paid immediately.
"And that's when the hearing went off the rails," Pamplin said.
The attorneys side-barred and the judge ruled the hearing was adjourned until another date. No date given, and no reason was given for why the hearing ended so abruptly.
"These plea deals are typically buttoned up before it gets before the judge," Pamplin said. "We asked both Smith's attorney, Gerald Evelyn, and Robert Moran from the U.S .Attorney's Office (what happened); both had no comment."
Following the hearing, Detroit Riverfront Conservancy CEO Ryan Sullivan issued a statement, saying: "We are disappointed that today did not meet our expectations of a guilty plea, and we look forward to this being resolved in the near future. All of us at the Detroit Riverfront Conservancy are thankful to the United States Attorney's Office for their continued efforts in investigating and prosecuting this case."
Smith was fired from the conservancy in late May in connection with the alleged scheme that dates back to at least 2012.
Authorities allege Smith embezzled millions of dollars mean 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.
Smith is also accused of diverting funds to the Joseph Group, a company he controlled, but one that was not an approved vendor and did not provide services to the conservancy.
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 could face up to 20 years in prison.
WWJ Newsradio 950 has calls out to try to get more information about what comes next in this high-profile case.
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