William A. Smith (courtesy Detroit Riverfront Conservancy)
See update at end of story
In 2021, William A. Smith, a nonprofit chief financial officer from Detroit, blew more than $100,000 on a personal two-day trip to Las Vegas. The private jet alone cost $94,000. In that short period Smith charged nearly $14,000 at Drai’s Beach Club and Night Club on the roof of the luxury Cromwell Las Vegas hotel-casino, where he stayed.
How do I even know these numbers, and why do I care? Detailed court filings, my friends. Smith pleaded guilty last year to embezzling an astonishing $44 million over 12 years from the Detroit Riverfront Conservancy.The agency has been redeveloping the 5½-mile-long Detroit River waterfront facing Canada with public and private money. Smith is to be sentenced April 24 in Detroit federal court on wire fraud and money laundering counts. The feds are asking District Judge Susan DeClercq for a sentence of 18 years in prison and restitution of $44.3 million, mostly to the nonprofit.
So Smith, 52, becomes the newest candidate for my long-running list, It Didn’t Stay Here. The roster consists of folks in trouble elsewhere for something that happened in that bug light of mischief called Las Vegas (here, the spending of funds stolen from someplace else). The list is a pointed refutation of “What Happens Here, Stays Here,” the famous marketing slogan the Las Vegas Convention and Visitors Authority used for many years. You can see a list of the nominees nearby.
In Smith’s case the Sin City piece, entirely funded from that stash, is pretty small beer. But it’s a concoction far-away prosecutors historically have been powerless to resist in drafting such criminal court filings for public, ah, consumption.
This account is drawn mainly from court filings and official press releases, along with public charity tax returns and media reports. Most noteworthy: the “Government’s Memorandum in Aid of Sentencing” that was submitted just a week ago to the U.S. District Court for the Eastern District of Michigan. The 35-page document laid out Smith’s spending and m.o. in great specificity, including, for the first time, the Vegas action.
Raised in Detroit, Smith earned an M.B.A. in finance from Wayne State University. He joined the riverfront conservancy in 2006 as senior director of finance and in 2011 was promoted to CFO. According to tax filings, his 2023 total compensation was $266,188. But the feds say that was almost just a rounding error.
Starting in 2012, Smith started stealing funds. He did so in a number of ways. Smith created shell entities–The Joseph Group & Associates LLC, First Round Management LLC and William Smith & Associates LLC–that did no business with the conservancy but received nearly $30 million in its funds. That included $15 million of charges on four American Express cards he used for personal expenses. He simply used conservancy funds to purchased cashier checks from third parties. All told, there were hundreds and hundreds of illicit wire transfers.
What was the money spent on? It’s a lavish, colorful list, and a girlfriend on the side seems to have been a significant recipient. Among the noteworthy items listed in that sentencing memorandum:
–$100,000 to rent a private yacht, the XO of the Sea, for a week-long Mediterranean cruise in 2021.
–$525,000 for items from luxury retailers Gucci and Louis Vuitton
–$507,000 for floor seat at Detroit Pistons home games.
–$60,000 in 2019 to cover what was described as a “wedding venue in Mexico” (it’s unclear from the record whose wedding).
–$54,000 “at Golden Sun Jewelry in Southfield, Mich.”
–An unspecified amount, but at least $196,000, toward the purchase of a $429,000 house for cash in Cypress, Texas, a suburb of Houston.
And, of course, Vegas, baby. From the government sentencing memo:
In June 2021, Smith charged a two-day trip to Las Vegas where he stayed at the boutique Cromwell Hotel. while at the Cromwell he charged: $8,219.01 at the ‘Drais Rooftop,’ an expensive Las Vegas entertainment venue; $5,656.44 at the Drais Beach Club; and to travel to Las Vegas, Smith chartered a private jet, round-trip cost was $94,023.
Smith disembarks from private jet on his Vegas junket (government filing)
At this point the memo reproduced a color photo taken on June 28, 2021, of Smith wearing drawstring shorts getting off that private jet. You can see the shot nearby. The memo doesn’t say who took the photo or if Smith was with anyone. (FWIW, the Cromwell is changing its name to The Vanderpump in a deal with reality TV star Lisa Vanderpump.)
Previous filings and civil restitution lawsuits, some naming Smith relatives and friends as defendants, say Smith also used stolen money to buy a yacht, a Mexican condo, and properties in Georgia and Michigan.
He took numerous acts to cover up his acts. Among them: falsification of bank statements, unauthorized loans to shore up bank balances, issuance of forged documents and making false claims that money secretly going into his pocket was just to repay government grants that in fact required no repayment.
But, one might fairly ask, where were the nonprofit’s board of directors, auditor, other top officials and maybe the news media during all of this? After all, $44 million, even over a long period of time, is a huge chunk of change for a single agency whose annual operating budget in 2023, the last full year before Smith was unmasked, was only about $17 million, according to tax filings. And the riverfront conservancy is a high-profile organization in Detroit.
Again from the government sentencing memo:
Following a March 2024 board meeting, the Conservancy’s leadership became concerned about the financial condition of the organization and grew dissatisfied with Smith’s evasive answers on the topic. In April 2024. Smith became physically ill and took a leave of absence from the Conservancy. In early May 2024, the Conservancy suspended Smith and shortly thereafter referred the matter to law enforcement for an investigation …
Oh to be a New to Las Vegas fly on that boardroom wall. As the scandal exploded, longtime conservancy CEO Mark Wallace quickly resigned. He has not been implicated in criminal wrongdoing.
Last night, lawyers for Smith filed their own 26-page sentencing memorandum with the court asking for leniency. They called the requested 18-year sentence “clearly out of proportion to the circumstances of this case” and said it should be between 12½ and 15½ years (which doesn’t strike me as all that much less).
Attorneys Gerald K. Evelyn and Robert E. Higbee said their client was “extremely remorseful ” and cooperated when caught. They pointedly added: “The Defendant’s conduct requires punishment, but the Defendant should not receive more punishment than the law requires or is necessary merely because the victim’s voice is amplified by the media and because the [Riverfront Conservancy] includes many influential and important voices in this community.” In another passage, they said that Smith has been vilified due to “the press relations that the [conservatory’s] high-profile board members and executive enjoy.”
Not surprisingly, the pleading made no mention of any of the specifics of Smith’s wrongdoing. Certainly not his Vegas junket to the Cromwell that provided prosecutors with their own heady brew.