Detroit Riverfront Conservancy sues former CFO, accusing him of embezzling approximately $40 million
The Detroit Riverfront Conservancy (DRC) filed a lawsuit on Wednesday in the Third Judicial Circuit Court of Wayne County, Michigan, accusing former Chief Financial Officer William Smith of embezzling approximately $40 million from the nonprofit organization between November 2012 and March 2024 through methods such as falsifying bank records and financial statements. The lawsuit names Smith's mother, wife, and sister as co-conspirators and accuses his friends of assisting in hiding assets. Previously, U.S. federal prosecutors had filed criminal charges of bank fraud and wire fraud against Smith, and a court has frozen some of his assets.
Key Points
- The Detroit Riverfront Conservancy (DRC) filed a lawsuit against its former chief financial officer, William Smith, after federal prosecutors accused him of embezzling approximately $40 million from the nonprofit over several years.
- According to the complaint filed Wednesday in Michigan's Wayne County Third Circuit Court, Smith transferred DRC funds to personal accounts, falsified bank records and financial statements, and enlisted family members to conceal the scheme. The nonprofit is seeking full monetary damages.
- In a related criminal case pushed by the Conservancy's board, the U.S. Attorney's Office has charged Smith with bank fraud and wire fraud, and placed liens on real estate in his name and that of his holding company.
Deeper Dive
The DRC's lawsuit names Charlotte Smith, Kimberly Smith, and Jennifer Smith—the former treasurer's mother, wife, and sister, respectively—as co-conspirators. They are accused of using Conservancy funds to purchase high-end interior design supplies, beauty products, shoes, restaurant meals, and other luxury items.
William Smith himself allegedly also used DRC funds to pay for NFL tickets, limousines, hotel stays, airfare, jewelry, and clothing. The complaint states that the former CFO, as an officer of the Conservancy, breached his fiduciary duties, causing "massive financial destruction" to the organization.
The nonprofit also claims that Smith's close friend, local businessman Darrell Greer, attempted to help hide assets after the scheme was uncovered.
"This lawsuit is just one part of our accountability framework," DRC interim CEO Ryan Sullivan said in a Wednesday press release. "We will relentlessly pursue our claims and recover the funds stolen by Smith and his co-conspirators."
The lawsuit marks the latest turn in the scandal that has shaken the Conservancy, a 501(c)(3) organization whose mission is to develop the Detroit International Riverfront, including a riverwalk with plazas, pavilions, and green spaces.
Federal prosecutors last month charged Smith, 51, with bank fraud and wire fraud in connection with an embezzlement scheme in which he allegedly stole nearly $40 million from the DRC during his tenure as treasurer from November 2012 to March 2024.
According to the government, Smith carried out the scheme by using DRC funds to pay expenses incurred on American Express accounts in his name and those of family members, and by transferring Conservancy funds to a company he controlled called the Joseph Group.
Prosecutors said neither type of expenditure was authorized or approved by the DRC's board.
"This defendant is accused of abusing the Conservancy's trust to commit fraud on a shocking scale," U.S. Attorney Dawn Ison said in a June 5 press release announcing the criminal case.
After the charges were filed, U.S. District Judge Linda V. Parker issued a temporary restraining order freezing up to $39.3 million in assets tied to Smith, as previously reported by CFO Dive.
Smith and his co-defendants could not be immediately reached for comment.