The former CFO of the Detroit Riverfront Conservancy has pleaded guilty to embezzling more than $40 million

DETROIT (WXYZ) – The former CFO of the Detroit Riverfront Conservancy has pleaded guilty to federal charges in a “scheme” to embezzle more than $40 million.

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William Smith pleaded guilty Friday to one count of wire fraud and one count of money laundering in federal court in Detroit. Each count carries a statutory maximum term of imprisonment of up to twenty years.

“Today, William Smith pleaded guilty to a financial crime that is staggering in its scope and impact,” United States Attorney Ison said in a news release. “Smith stole more than $40 million from the Detroit Riverfront Conservancy, a nonprofit dedicated to creating beautiful public spaces for Detroit residents and visitors to use and enjoy. Not only did Smith betray the trust of the Guard, but the trust of the entire community to enjoy wealth and comfort. I am still shocked by the scale of the fraud and the damage it has caused, and today’s guilty plea is an important step towards holding Mr Smith accountable for his outrageous behaviour.’

Smith served as the Conservancy’s chief financial officer from 2011 to May 2024. Officials say that as part of his job, he “exercised considerable discretion in the oversight and management” of the Conservancy’s finances.

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According to the plea agreement Smith entered into, beginning no later than November 2012 and continuing through May of this year, Smith “orchestrated” a scheme to embezzle millions. According to the agreement, Smith’s embezzlement took three forms:

• First, Smith transferred Conservancy funds from the organization’s bank accounts to a bank account in the name of “The Joseph Group, Inc.”, an entity owned and controlled by Smith. The Joseph Group was not an approved supplier to the Conservancy and did not provide any goods or services to the organization. However, between February 2013 and May 2024, Smith transferred approximately $24.4 million from the Conservancy’s bank accounts to an account on behalf of the Joseph Group.
• Second, Smith maintained an American Express account in the name of another of the many entities he owned and controlled, called “William Smith & Associates LLC.” Four American Express credit cards were issued to this account. Between November 2012 and May 2024, Smith used approximately $14.9 million in Conservancy funds to pay for purchases made on the account. None of these charges 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.
• Third, Smith used Conservancy funds to purchase cashier’s checks from various financial institutions. These purchases of cashier’s checks 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.

According to officials, Smith concealed his activities by falsifying bank statements he provided to the Conservancy’s accountant, altering or deleting unauthorized transfers so they would not be accounted for, and using forged documents to obtain a line of credit on behalf of the Conservancy that he was not authorized to do. Board of Directors. Officials say Smith used the funds for a line of credit that eventually totaled $5 million to replace the funds he took out to cover up the embezzlement.
According to the plea agreement, Smith also concealed the origin of the funds he received by transferring them through intermediary structures.

In the plea agreement, officials say the financial loss from Smith’s embezzlement is difficult to quantify. Under the settlement, he agreed to pay at least $44.3 million in restitution.

Smith’s sentencing is scheduled for March 20, 2025.