A federal judge sentenced William Smith, 52, to 19 years in prison for stealing at least $44.3 million from the Detroit Riverfront Conservancy, concluding a staggering case of theft that went undiscovered for more than a decade under the noses of some of the region’s most powerful business leaders.
The nonprofit’s ex-chief financial officer pleaded guilty late last year to one count each of wire fraud and money laundering and faced a maximum of 20 years in prison. Prosecutors had requested Smith be sentenced to 18 years in prison, while his attorneys sought 12½ to 15½ years.
“My actions were wrong plain and simple,” Smith told U.S. District Court Judge Susan DeClercq before she announced his sentence. “I recognize I allowed selfishness, pride and poor judgment to lead me down a destructive path.”
DeClercq also ordered him to pay about $48 million in restitution, $43 million to the Conservancy and $5 million to Citizens Bank. She allowed him to remain out on bond, with plans that he report to prison at a later date.
The Riverfront Conservancy, for its part, sought the maximum 20-year penalty in a victim impact statement filed this week, arguing Smith’s theft harmed the nonprofit’s donors and staff and, more broadly, Detroit’s reputation.
DeClercq’s April 24 ruling comes just over a year after leaders of the nonprofit tasked with revitalizing Detroit’s riverfront discovered financial irregularities amidst a cash shortfall and commissioned an external audit. The findings were forwarded to federal authorities, leading to Smith’s arrest in June and a criminal complaint that outlined the stunning scope of his theft from a nonprofit largely supported by philanthropic and public dollars.
Federal prosecutors have accused Smith of embezzling to support a lavish lifestyle, with spending that includes $3.7 million in wire transfers to a mistress, $500,000 in Pistons floor tickets and nearly $200,000 to charter a private jet and yacht.
Smith’s scheme involved transferring funds from a secondary conservancy checking account to a bank account in the name of an LLC he registered shortly after his promotion to CFO, authorities said. He allegedly covered up the theft by doctoring records and taking out an unauthorized line of credit for $5 million to keep the nonprofit solvent.
In that time, he amassed millions in assets, including numerous properties throughout the country and in Mexico, a yacht, and the restaurant through which a lawyer for the Conservancy alleges he laundered $4 million − all as he worked on an approximately $200,000 salary at a nonprofit governed by the city’s top philanthropic, government, and business leaders.
Prosecutors have said they expect to recoup up to $3 million from Smith’s seized assets. Efforts by the Conservancy to retrieve additional funds are ongoing, including via a civil suit against Smith’s mother, wife, sister and the best man at his wedding, who the conservancy says benefited from Smith’s largesse.
(This is a developing story. Come back to the Free Press for updates)
Violet Ikonomova is an investigative reporter at the Free Press. Contact her at vikonomova@freepress.com.
This article originally appeared on Detroit Free Press: Ex-Detroit Riverfront CFO William Smith sentenced to 19 years prison