(This story was updated to add new information and images.)
The ousted Detroit Riverfront Conservancy chief financial officer was arraigned Thursday in federal court, accused of wire fraud and money laundering in a yearslong scheme that he siphoned millions from the nonprofit organization that he was financially overseeing.
William Smith, then 51, initially was accused in a criminal complaint unsealed in U.S. District Court in Detroit in June. A criminal information was filed Tuesday in federal court, which commonly suggests a plea deal is in the works.
Magistrate Judge Elizabeth Stafford entered a not guilty plea and continued Smith's prior bond conditions. A plea hearing is set for Oct. 21 in federal court.
Smith's lawyer, Gerald Evelyn, had no comment after Thursday's brief proceeding, which was attended by about 10 members of the conservancy or interested parties.
U.S. Attorney Dawn Ison, who attended Thursday's proceeding, had no comment afterward. She shook hands with and spoke with conservancy members and their related party before it began.
Ison's spokesperson, Gina Balaya, said Wednesday "we're going to let the document (filed this week) speak for itself."
Assistant U.S. Attorney Robert Moran told the court Thursday that the loss amounts exceed $40 million.
If convicted, Smith could be sentenced up to 20 years in prison and have to pay fines of $250,000 and $500,000 or more, depending on the charge, Stafford said.
"The Conservancy welcomes any efforts by the U.S. Attorney's Office to hold Smith accountable for his crimes. We appreciate their continued vigilance and speed to prosecuting Smith," Ryan Sullivan, the conservancy's interim CEO, said in a statement emailed to the Free Press on Thursday.
Smith appeared in court in a dark-colored suit and answered "yes" to questions posed by Stafford as he stood with Evelyn.
Smith has been accused of siphoning 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 had said.
The criminal information this week dates 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 states 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 states he used the embezzled funds to buy real estate and support his personal and business interests.
It alleges 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.
More: Amid scandal, interim Detroit Riverfront Conservancy CEO focuses on future
It indicates 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 states 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 adds 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 $3.9 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.
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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This article originally appeared on Detroit Free Press: Ex-Detroit Riverfront Conservancy CFO arraigned in federal court, plea hearing date set
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