Lengel: The Feel-Good Detroit Riverfront Conservancy Was A Blind Agency With Way Too Few Checks and Balances

June 06, 2024, 12:25 AM by  Allan Lengel

William Smith

CFO William Smith, congenial and outgoing, seemed like a natural to represent the Detroit Riverfront Conservancy, a nonprofit agency that Detroiters could feel good about. After all, its mission was to help develop and promote the riverfront, and an enthusiastic Smith seemed all in.  

Now that it's clear the agency had no, or at least very lame checks and balances, Detroiters should feel nothing but contempt and nauseousness, particularly those who regularly donated to the cause. If you're one of those folks, yes, you have a right to be very very angry.   

Smith, 51, of Novi, faces federal charges of  embezzling nearly $40 million in public and private funds to pay for luxury goods at the Gucci store, jewelry, bills, and investments in real estate and businesses. Only a sociopath could be such a prolific thief of nonprofit funds while smiling everyday in the faces of Detroiters, pretending to represent their best interests. 

It wasn't a quick theft. It happened over nearly 12 years, from 2012 to 2024, according to federal authorities. 

What kind of organization loses track of that kind of money for that long a period? A very incompetent one. It's insane, it stinks of corruption, negligence and malfeasance. Sorry, but Smith shouldn't be the only person facing federal corruption charges. Someone else had to have had some suspicion, or maybe even been complicit. You can't tell me that the people overseeing Smith took their jobs very seriously.

Where were the checks and balances? Where were the board members? Where were the accountants? Could Smith have been that clever to dupe them all for not one, not two, not three years, but for more than a decade? Or were the people around him that dumb, or indifferent as to how funds were being spent? 

Robert Snell of the Detroit News reports:

Millions of dollars that the FBI says were stolen from the conservancy remained missing Wednesday, according to a source familiar with the investigation, as details emerged about how Smith spent money. That includes a $1.2 million home in a gated community in Novi, the nightclub in Southfield, a cigar lounge project in Detroit and an investment in Michigan's "Black Eden" — all acquired while Smith made less than $250,000 a year at a not-for-profit organization credited with transforming Detroit's riverfront.

Some of the funds went to pay for charges that he and his family ran up on an American Express account. Secondly, he allegedly diverted funds to "The Joseph Group," a company he controlled.

To cover up his embezzlement, the federal government's criminal complaint alleges Smith doctored bank statements he provided to the Conservancy’s accountant.

Last year, Smith allegedly obtained an unauthorized $5 million line of credit with Citizens Bank on the Conservancy’s behalf, the U.S. Attorney's Office said in a press release.

The FBI affidavit also found Amex credit card charges including a $4,850 purchase of men's clothing on Jan. 3, 2013 at Revive in Birmingham. On Jan. 24, 2013, he made a $5,618.00 jewelry purchase from Diamonds Direct in Southfield. In March 2013 , his Amex statement showed a $12,900.44 charge from Draper Chevrolet Toyota in Saginaw and a $17,452.80 charge from Louis Vuitton.

If anything, people tied to the organizations should have wondered about his lifestyle and assets. His wife certainly did.

As the News reports, in an October 2022 court filing for divorce, Kimberly Smith, hints at untold riches and "vast" expenses.

"The marital estate is expansive, and plaintiff has been kept in the dark about the family's assets for the duration of the marriage," her divorce lawyer, Jill Duffy, wrote. "(William Smith) owns several companies, where he can easily hide or dispose of property, the extent of which is unknown..."

Sorry, maybe $500,000 missing or even a million or two; maybe a very clever embezzler could pull that off.

But nearly $40 million over nearly 12 years? 

No. No. No. Sorry, someone had to be suspicious, or perhaps complicit. Or in the most charitable view, incompetent and negligent. 

That's not chump change.

It will take a while for any donor or any fan of the agency to feel good about the program. I gave to the Conservancy once on behalf of a bride and groom who loved Detroit. That won't happen again. I'd be better off donating to The Human Fund, the scam charity George Costanza made up in a Seinfeld episode. 

Donors might feel a little better if the feds can determine that Smith isn't the only person to blame.

More people have to take a hit -- or at least step down or get fired -- in one of the biggest scams in Detroit history.

As a Detroiter, we're tired of being scammed.


Leave a Comment:

Photo Of The Day