Dive Brief:

• U.S. District Judge Linda V. Parker issued a temporary restraining order Saturday freezing up to $39.3 million in assets of William A. Smith, the former CFO of the not-for-profit Detroit Riverfront Conservancy, according to a now unsealed filing. The move comes about three weeks after federal prosecutors charged Smith, 51, with bank and wire fraud in connection with an embezzlement scheme through which he is alleged to have stolen “tens of millions” from the conservancy while working as its finance chief between November 2012 and March 2024.
• U.S. Attorney Dawn Ison requested injunctive relief in a court filing Friday, asserting the move was necessary because Smith was “actively moving and dissipating assets, including assets likely gained by his fraud and money laundering” that would otherwise be available to repay victims. Smith appears to control a a two-bedroom condo in Los Cabos, Mexico, that was listed for sale at $385,000 as of June 12 and he was recently trying to sell a 36-foot Cruisers 35 Express “yacht” named “SS Duo,” according to the filing, which states his assets also include two motorcycles along with real estate in Michigan, Texas and Georgia.
• “The Court finds that there is a strong likelihood of irreparable injury to Smith’s victims, including the Conservancy, Comerica Bank, and the Conservancy’s donors and financial partners unless this order is issued ex parte, thus allowing prompt service on appropriate financial institutions and persons acting in concert with or directing the activities of Defendant, before disclosure to Defendant, thus preventing further dissipation of criminal proceeds and funds otherwise available for restitution and forfeiture,” according to the order, which also set a hearing on the matter for Thursday. 

Dive Insight:

The restraining order is the latest twist in a fraud case that has rocked the Conservancy, a 501(c)(3) with a mission to develop access to the Detroit International Riverfront which includes a rivers walk with plazas, pavilions and green spaces. 

Smith joined the DRC as senior director of finance in 2006 and was promoted to the CFO chair in 2011. Once a finalist for the Crain’s CFO of the Year Award in 2013, he also served on the board of directors for Develop Detroit, a non-profit that specializes in affordable and mixed-income housing. 

But the story has recently grown rocky. He held the finance chief role until May when he was initially placed on leave and ultimately terminated “for cause” on May 31, according to the filing.  

The government alleges that, as early as November 2012 and “continuing until his suspension, Smith embezzled funds belonging to the [DRC], falsified documents to conceal his theft from the Conservancy’s Board and Conservancy employees, and fraudulently obtained a $5 million line of credit from a financial institution secured by the Conservancy’s pledged donations after Smith’s embezzlement threatened to exhaust the Conservancy’s cash reserves,” the filing states.

In its case the government asserts that Smith used the embezzled funds for his own personal gain, spending the money on everything from airline tickets to hotels, limousines, household goods, lawn care, clothing and jewelry.

The Conservancy and Smith’s attorney Gerald Evelyn did not immediately respond to requests for comment.