The former chief financial officer for the Detroit Riverfront Conservancy, who was accused of embezzling tens of millions of dollars from the organization, pleaded guilty on Friday to federal charges stemming from his yearslong scheme, prosecutors announced.
According to court records, the former executive, William A. Smith, stole more than $40 million, and perhaps as much as $65 million, from a nonprofit group tasked with beautifying the city’s once-industrial waterfront into a recreation space, with plazas, pavilions and parks.
Mr. Smith, who was arrested in June, pleaded guilty to one count of wire fraud and one count of money laundering, each carrying maximum penalties of 20 years in prison.
“William Smith admitted today to perpetrating a financial crime that is astonishing in its scope and impact,” Dawn N. Ison, the U.S. attorney for the Eastern District of Michigan, said in a statement.
Mr. Smith “not only betrayed the conservancy’s trust, but he betrayed the trust of the whole community, all so that he could enjoy the trappings of wealth and comfort,” she said, adding that she remained “shocked at the scale of the fraud and the harm it has caused.”
Messages to Robert Higbee, a lawyer listed for Mr. Smith in court records, were not immediately returned on Saturday.
Mr. Smith “enjoyed substantial discretion” in his role overseeing and managing the group’s financial affairs, according to the plea agreement, which said that his multiyear scheme had begun by November 2012 and lasted until May 2024.
Prosecutors said in a June statement that Mr. Smith was fired in late May.
The scheme came about in three ways, according to the plea agreement, which detailed his extensive fraud. The first involved Mr. Smith transferring roughly $24.4 million from the conservancy’s coffers to a bank account for the Joseph Group, Inc., which he owned and controlled.
Mr. Smith also maintained an American Express account in the name of William Smith & Associates, LLC, which had four credit cards issued to it.
According to the plea agreement, Mr. Smith used approximately $14.9 million of the conservancy’s funds to pay off purchases made on the account, including furniture, designer clothing, handbags, airline tickets and other consumer goods.
Lastly, Mr. Smith used the nonprofit’s money in purchasing cashier’s checks from “various financial institutions” to use for his own purposes.
The plea agreement describes the ways Mr. Smith tried to cover up his scheme, including sometimes falsifying bank statements and even going as far as forging authorization forms to take out a line of credit on behalf of the nonprofit.
Mr. Smith “made regular use of interstate wire communications” in his scheme, according to the plea agreement, including making electronic payments from the group’s bank account to pay off his American Express charges.
The plea agreement states that it is “difficult to quantify with precision” the losses caused by Mr. Smith’s embezzlement, but that it “can be conservatively estimated as between $40 million and $65 million.”
Officials said in the statement on Friday that he “agreed to pay no less than $44.3 million in restitution as a result of his conduct.”
“Mr. Smith’s deceitful actions, which spanned for more than a decade, not only broke the trust of his employer, but the entire community,” Cheyvoryea Gibson, the special agent in charge of the F.B.I. field office in Michigan, said in the statement.
Ryan Sullivan, the chief executive of the Detroit Riverfront Conservancy, said in the statement that the group was pleased to see Mr. Smith “held accountable for his disgraceful actions” and that it would “continue to pursue civil litigation in pursuit of the stolen money.”
Mr. Sullivan also said that the nonprofit will “complete the review of our financial operations and announce a series of reforms that address lessons learned from this scandal.”
The post Ex-Officer of Detroit Nonprofit Pleads Guilty to Stealing More Than $40 Million appeared first on New York Times.
