Detroit Riverfront Conservancy fires CFO after investigation, $40M may be lost

The Detroit Riverfront Conservancy board voted to fire its chief financial officer and replaced its CEO after a financial investigation was launched, which was turned over to the FBI, the organization said.

William Smith, who was the CFO, was placed on leave earlier this month after board Chairman Matt Cullen said he “became concerned about the accuracy of management reports and financial statements” that were provided to the board.

Auditing firm PwC and Honigman Law Firm were asked to investigate. Evidence of alleged financial wrongdoing by the CFO was brought to Michigan State Police. A criminal investigation was requested.

The investigation was then turned over to the FBI after Cullen said it became more complex.

Watch our previous report of the FBI taking over the investigation below:

Honigman found that more than $40 million was missing, the conservancy said.

On Friday, the Detroit Riverfront Conservancy said Ryan Sullivan will serve as interim CEO and replace Mark Wallace. Wallace resigned as CEO but will stay on as a transitional adviser.

Detroit Riverfront Conservancy

Sullivan will oversee a review of the group’s financial, governance and operational policies, which was ordered by the board.

The conservancy named Karen Slaughter-DePerry executive in charge. They said she is a long-term conservancy executive and will be in charge of all construction activities.

“As volunteers, we believed that the right team and processes were in place to protect the financial integrity of the organizations,” the board said in a resolution. “That belief was disabused by the recent discovery of this significant financial crime.”

The board says it’s working to recover money from Smith.

Former U.S. Attorney Matthew Schneider leads investigations at Honigman and sent a letter to Smith’s attorney about the termination of his employment, which said:

“Our investigation has revealed that Mr. Smith has embezzled significant sums of money from the DRFC and has converted DRFC funds to his own personal use. Mr. Smith’s unlawful conduct spans several years. We are therefore terminating Mr. Smith’s DRFC employment, effective immediately, for cause.”

Quattro Financial Services was brought in to oversee financial and accounting activities for the conservancy.

The conservancy also said it “secured new philanthropic financial support to ensure the on-time completion of Detroit’s international riverfront revitalization.”