An attorney for the ex-chief financial officer of the Detroit Riverfront Conservancy stopped his client’s scheduled plea hearing short Monday saying an undisclosed issue developed with the agreement.
About halfway through a scheduled plea hearing for William Smith, one of his attorneys, Gerald Evelyn, asked for a recess in U.S. District Court in Detroit and a private meeting was held.
Related:
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- Detroit Riverfront Conservancy files civil suit against former CFO, friends and family
Attorneys returned about 20 minutes later. Evelyn told U.S. District Judge Susan DeClercq that an issue developed, though it was not disclosed in court, and they could not proceed further. No new court date was set, with DeClercq telling the attorneys to let them know when they were ready.
Neither the U.S. Attorney’s Office nor Evelyn had a comment after the hearing. Evelyn said “not at all” when asked for comment and what the issue was that developed.
“We are disappointed that today did not meet our expectations of a guilty plea, and we look forward to this being resolved in the near future. All of us at the Detroit Riverfront Conservancy are thankful to the United States Attorney’s Office for their continued efforts in investigating and prosecuting this case,” conservancy CEO Ryan Sullivan said in a statement Monday.
Smith was accused of a yearslong scheme in which more than $40 million was siphoned from the nonprofit organization and into his pockets for what federal prosecutors called a lavish lifestyle. Smith was expected to plead guilty to wire fraud and money laundering, which could land him up to 20 years in federal prison.
Before the pause in court, Assistant U.S. Attorney John Neal indicated the government currently presents estimates of sentencing guidelines that would fall between 15½ years to 19½ years in prison; and potential restitution would be a minimum of $44.3 million and could be higher. There was a mention about identifying assets and forfeiting property. After that, Evelyn asked for a recess.
Smith, 52, was arraigned in September, accused of wire fraud and money laundering from the nonprofit he financially oversaw. He initially was accused in a criminal complaint unsealed in federal court in June. A criminal information was filed in September, which commonly suggests a plea deal is in the works. The plea hearing was set for Monday.
Smith answered basic questions from DeClercq in court Monday, answering simply “yes, your honor” to many questions. He indicated he currently lives in a home in Detroit with his parents. The house appears to be a bungalow from an online search.
Smith said he is currently not employed, that he worked at the conservancy for 18 years and that he has a master’s degree in finance and a undergraduate degree in accounting.
If convicted of the charges, Smith could be sentenced to up to 20 years in prison and have to pay fines of $250,000 and $500,000.
Smith has been accused of pilfering nearly $40 million from the nonprofit organization during an 11-year period. The conservancy is funded by public grants and private donations.
Federal prosecutors accused him of embezzling to support a lavish lifestyle, with spending on air travel, hotels, limos, clothes, jewelry and more, the Free Press previously reported. Allegedly stolen funds from the organization went to cover credit card charges made by him and his family members from 2012 through 2024, including a $17,500 Louis Vuitton purchase, federal investigators have said.
The criminal information filed in September dated the scheme from about November 2012 through about May of this year. It alleges Smith transferred conservancy funds from the organization’s Comerica Bank account to a bank account in the name of The Joseph Group & Associates LLC, a corporation owned and controlled by Smith.
The corporation was not an approved vendor for the conservancy, and it provided no services to the organization, according to the filing.
It stated Smith “routinely and without authorization” transferred the funds, which he then transferred to accounts held by other entities he owned and controlled, including First Round Management LLC. The criminal information stated he used the embezzled funds to buy real estate and support his personal and business interests.
It alleged Smith used conservancy funds to pay off American Express charges he and his family incurred, typically by initiating wire transfers from the conservancy’s account at Comerica Bank to American Express to pay off the credit card balances.
None of the expenditures were authorized by the conservancy, according to the filing.
It indicated that Smith and his family incurred about $15.6 million in American Express charges between November 2012 and May 2024, and Smith used about $14.9 million in conservancy funds to pay off the charges during the same time period.
Smith is accused of buying cashier’s checks from various financial institutions, purchases that were not authorized, and using the cashier’s checks for his own purposes without the knowledge or approval of the conservancy’s board of directors.
The filing stated Smith “covered up and sustained his fraudulent scheme by falsifying bank statements that he provided to the Conservancy’s bookkeeper, altering or deleting unauthorized transfers on the statements in order to keep them off of the Conservancy’s books.”
It added that Smith took out a line of credit with Citizens Bank on behalf of the conservancy, claiming to be acting with the authorization of the group’s board of directors “but, in fact, he had no such authority.” He is accused of using the funds from this line of credit, which eventually totaled $5 million, to infuse monies into the conservancy’s bank accounts to help cover up his embezzlement.
For the laundering charge, Smith is accused of initiating the transfer of $65,000 in funds embezzled from the conservancy from a bank account held by The Joseph Group & Associates LLC to an account held by First Round Management LLC on or about Sept. 24, 2021.
Smith was fired from the conservancy by a vote of the nonprofit’s board and the former CEO resigned amid the criminal investigation. The FBI previously raided Smith’s Northville home as well as his conservancy office twice, according to prior Free Press reporting.
In a prior, separate federal civil forfeiture matter against Smith, up to $39 million of his assets were frozen, though a judge previously granted him a monthly allowance of up to $3,421 from a rental property he owns.
A temporary restraining order permits the controlled sale of property under certain conditions disclosed to the U.S. Attorney’s Office, with proceeds preserved for the benefit of Smith’s victims and ultimately subject to court approval.
In May, a contract for the purchase of a property in Idlewild, Michigan, that Smith owns was entered into by Smith and a prospective buyer. The U.S. Attorney’s Office recommended the court approve the proposed sale in a document filed in court Oct. 15. An online search of the property shows an image of a party store.
The stipulated agreement filed with federal court would place funds from the sale of the property into an escrow account maintained by the U.S. Marshals Service pending resolution of the civil and/or criminal proceedings. Upon closing of the transaction, a cashier’s check payable to the U.S. Marshals Service is to be made out for $77,827, according to the filing. The prospective buyer is not named in the court document.
It states that Smith agrees that in the event of his conviction in the criminal case, he will forfeit the proceeds of sale up to the amount of any forfeiture money judgement.
The conservancy also filed a civil lawsuit against Smith, his family members, and a friend in July in Wayne County Circuit Court in a step to recoup some of the alleged millions he is accused of embezzling.
Contact Christina Hall: chall@freepress.com. Follow her on X, formerly Twitter: @challreporter.
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