Detroit, MI — William A. Smith, the former Chief Financial Officer (CFO) of the Detroit Riverfront Conservancy, pleaded guilty today to federal charges in a massive, years-long scheme to embezzle more than $40 million from the nonprofit organization. The 52-year-old Northville resident, who served as CFO from 2011 until his arrest in May 2024, faces significant prison time after admitting to wire fraud and money laundering, both of which carry a maximum penalty of 20 years in prison.
Smith’s embezzlement scheme spanned over a decade, during which he exploited his position of authority to siphon millions of dollars from the Conservancy, a nonprofit committed to revitalizing Detroit’s riverfront. The scheme’s breadth and the impact on the organization’s mission are described as “astonishing” by federal officials.
In a statement, U.S. Attorney Dawn N. Ison expressed shock at the scale of the fraud. “William Smith admitted today to perpetrating a financial crime that is astonishing in its scope and impact,” she said. “Smith not only betrayed the Conservancy’s trust but also the trust of the entire Detroit community, all so that he could enjoy personal luxuries at the expense of public funds intended to benefit Detroit’s residents and visitors.”
The Detroit Riverfront Conservancy is responsible for the development of the city’s riverfront area, including the creation of the popular Riverwalk. It is funded by both public grants and private donations. As CFO, Smith had significant discretion over the organization’s finances, a position he used to orchestrate his fraudulent activities.
The Embezzlement Scheme
Court documents reveal that Smith began embezzling funds no later than November 2012 and continued his activities until May 2024. The scheme involved three primary tactics:
- Diverting Funds to Personal Accounts: Smith transferred approximately $24.4 million from the Conservancy’s accounts to a separate bank account he controlled under the name “The Joseph Group, Inc.” This entity, though under Smith’s control, was not an approved vendor and provided no legitimate services to the Conservancy.
- Misuse of American Express Account: Between November 2012 and May 2024, Smith used Conservancy funds to pay off charges made on an American Express account linked to another company he controlled, “William Smith & Associates LLC.” Smith used the funds to purchase personal items such as designer clothing, furniture, handbags, lawn care services, and airline tickets. The total amount misappropriated in this manner was approximately $14.9 million.
- Purchasing Cashier’s Checks for Personal Use: Smith also used Conservancy funds to buy cashier’s checks, which he then used for personal expenses, with no authorization from the Conservancy’s board of directors.
To conceal his activities, Smith employed various tactics to cover up the stolen funds. He falsified bank statements and manipulated financial records to hide the unauthorized transfers. In one instance, he forged documents to take out a $5 million line of credit from Citizen’s Bank, which he used to cover up his thefts and keep the scheme going.
Smith further disguised the stolen funds through a complex web of intermediate entities, moving money in a way that made it difficult to trace back to the Conservancy.
A Betrayal of Trust
As CFO of the Detroit Riverfront Conservancy, Smith held a position of immense trust and responsibility. The nonprofit was working toward the revitalization of public spaces along the Detroit riverfront, a key project for the city’s residents and visitors. The funds Smith stole were meant to benefit the public, helping to create parks, green spaces, and recreational areas along the river, which now will not receive the full benefit of those funds due to his actions.
Federal authorities emphasized the devastating impact of Smith’s actions on the community. “William Smith used his position of authority to financially profit at the expense of his employer,” said Cheyvoryea Gibson, Special Agent in Charge of the FBI’s Detroit Field Office. “His deceitful actions, which spanned more than a decade, not only broke the trust of his employer but the entire community.”
Charles Miller, Special Agent in Charge of IRS-Criminal Investigations (IRS-CI) in Detroit, added that unraveling such a complex financial fraud required significant investigative work. “Smith’s extreme breach of trust, millions of dollars stolen that would have benefitted the city for years to come, is almost unfathomable,” Miller said. “IRS-CI’s role in this investigation was critical in uncovering these fraudulent activities.”
Restitution and Accountability
As part of his plea agreement, Smith has agreed to pay no less than $44.3 million in restitution for his theft. While the total amount stolen remains difficult to precisely quantify, Smith’s acknowledgment of the embezzlement and his agreement to restitution represent a significant step toward financial recovery for the Conservancy.
Smith’s case underscores the vulnerability of nonprofit organizations to financial crimes, especially when individuals in positions of power exploit their authority for personal gain. It also highlights the importance of rigorous financial oversight and accountability, especially within organizations responsible for managing public funds.
“This was not just a breach of trust,” U.S. Attorney Ison concluded. “It was a theft from the entire city of Detroit—a betrayal of the people who relied on the work of the Detroit Riverfront Conservancy to create spaces that benefit the community.”
Smith is scheduled to be sentenced later this year. Federal authorities have pledged to continue their efforts to combat white-collar crimes and hold accountable those who use their positions to exploit others for financial gain.
