The Detroit Riverfront Conservancy (DRFC) is known for developing Detroit properties into spaces like the Dequindre Cut, a place many people visit. But on Nov. 15, the Conservatories CFO of William A. Smith pleaded guilty to charges for embezzling $40 million over the many years he has worked for them. He had been an employee of the DRFC for 18 years and was the CFO from 2011 to 2024. The conservancy is a 501(c)(3) organization, which means it’s a charitable organization working in the public’s interest. For example, the DRFC’s goal is to “transform Detroit’s international riverfront – the face of the city – into a beautiful, exciting, safe, accessible, world-class gathering place for all.” The Conservancy is funded by public donors and private grants. It is a nonprofit organization dedicated to making Detroit the best it can be.
According to the United States Department of justice as early as 2012 there were complaints about Smith and his plan to embezzle millions in funds; the complaint states that he was using the DRFC funds to cover his and his family’s expenses on an American Express account under “William Smith and Associates LLC.,” an entity controlled fully by Smith. Four credit cards were issued under this account to cover family expenses, which were paid off with $14.9 million from the conservancy. This account was used to buy items like designer clothing, trips, services, and many other goods. The complaint also accuses him of diverting funds to a company called “The Joseph Group Inc.,” which has never worked with the DRFC and has never provided any services for the conservatory nor was the fund being diverted authorized by the board of directors.
The alleged company was a completely controlled entity of Smith’s. Between the years 2013 and 2024, Smith transferred about $23 million into that account. The complaint issued to the U.S. attorney’s office in the Eastern Michigan District states that at least 40 million was embezzled through these two accounts. The last way Smith embezzled funds from the DRFC was by purchasing cashier checks once again unauthorized by the Conservatory from multiple financial institutions. A cashier’s check is a check that is drawn against your bank account instead of a personal account. The benefits are that they are more secure, the processing time is much quicker, and the funds are guaranteed. The benefits of the cashier checks make it easier to cover up fraud. But there are documents of cashier checks kept by the banks, and if a transaction of over $10,000 happens, the IRS must be made aware.
Smith attempted to cover up his scheme with falsified bank statements he gave to the DRFC’s bookkeeper to be entered into their system. He would delete or alter the statements that show he was making unauthorized purchases and moving money unauthorized. According to the U.S. Attorney’s Office, the false statements created errors in the information added to their books, making it difficult to detect the fraud committed by Smith. Smith is also alleged to have obtained a credit of $5 million from Citizens Bank with false authorization documents with forged signatures of the Board of Directors. He attempted to use this credit to infuse into the Conservancy’s bank account to try and cover the substantial amount he had embezzled from the company.
According to the plea documents from the attorney’s office, Smith had tried to continuously move the money through different entities so the embezzlement would be untraceable and hard to discover what the source was. In these plea agreements, he has agreed to pay at the minimum $44.3 million dollars in restitution to the Conservancy because it is hard to pinpoint the exact amount embezzled.
William A. Smith was in a position of power and was given a lot of trust by the Conservancy and the community, which he violated so that he could enjoy the pleasures of wealth with money stolen. The IRS was a huge part of this case considering the complex financial situations that took place. The Michigan FBI also took part in this case with huge amounts of money stolen from the conservancy.
This is one of Detroit’s biggest financial scandals. There have been some worries about the impact this fraud will have on the efforts to revitalize Detroit, but the board of directors has elected a new CEO, and already they are working to continue the hard work on what they have been doing to revitalize this city.
