Ex-CFO Of Detroit Riverfront Conservancy Stole Nearly $40M: Feds

DETROIT — The former chief financial officer of the Detroit Riverfront Conservancy stole nearly $40 million during a years-long scheme, according to federal prosecutors.

William Smith, 51, of Novi, was charged with bank fraud and wire fraud in what federal prosecutors said was "a years-long scheme by Smith to embezzle Conservancy funds for his own use."

Prosecutors said the scheme started as early as November 2012, just one year after Smith began serving as the chief financial officer of the organization, which is a non-profit that aims to help develop access to the Detroit International Riverfront from the Ambassador Bridge to Belle Isle. The organization is funded by a combination of public and private funds.

Federal prosecutors said Smith stole the money in two distinct ways: First he used the organization's money to pay for charges that he and his family accrued on an American Express account, and diverted organizational funds to a company he controlled called "The Joseph Group," according to federal prosecutors.

The funds were not authorized or approved by the board, and that Smith had no authority to use the funds to pay his own credit card bills, according to federal prosecutors.

To try and hide the scheme, federal prosecutors said Smith doctored bank statements provided to the nonprofit's accountant. The statements led to erroneous financial information being entered into the Riverfront Conservancy's books, which concealed the fraud, according to federal prosecutors.

Moreover, in 2023, Smith obtained a $5 million line of credit with Citizens Bank on behalf of the Conservancy that he was not authorized to take out, according to federal prosecutors.

To obtain the credit, Smith provided a false document to the bank, who then gave him the credit, which he used as part of his scheme, according to federal prosecutors.

Overall, federal prosecutors said Smith stole nearly $40 million from the organization between November 2012 and March 2024. He used the money to buy airline tickets, hotels, limousines, household goods, lawn care, clothing and jewelry, according to the criminal complaint.

"The Detroit Riverfront Conservancy’s mission is to transform one of our city’s greatest assets, the riverfront, into a vibrant and safe space for all to gather and enjoy," U.S. Attorney Dawn Ison said. "This defendant is alleged to have abused the trust the Conservancy placed in him and to have carried out a fraud that is simply astonishing in scale."

Detroit Riverfront Conservancy members placed Smith on leave last month after they found discrepancies with their financial documents. Last week, board members fired Smith and replace their CEO amid the investigation.

"As volunteers, we believed that the right team and processes were in place to protect the financial integrity of the organizations," board members said in a resolution. "That belief was disabused by the recent discovery of this significant financial crime."