How One CFO’s Actions Shook Detroit’s Vision

"It takes years to build trust, seconds to break it, and a lifetime to repair it." This bitter truth has struck the Detroit Riverfront Conservancy with staggering force. A nonprofit once celebrated for driving the revitalization of Detroit's riverfront now struggles with the fallout of a shocking betrayal. William Smith, its former CFO, pleaded guilty to siphoning $44.3 million over a decade in one of the city's most egregious financial frauds. How did a trusted leader exploit his authority to such devastating effect? And more importantly, what safeguards can nonprofits adopt to prevent such breaches in the future?

From Trusted CFO to Con Man 

William Smith was the financial steward of the Detroit Riverfront Conservancy for over a decade, overseeing funds for its ambitious riverwalk project. Beneath his polished exterior, Smith orchestrated one of Detroit’s most significant nonprofit frauds. From November 2012 to May 2024, Smith misappropriated millions through two schemes: 

• Shady Transfers: $24.4 million funneled into his company, The Joseph Group, under false pretenses. 
• Lavish Spending: $14.9 million charged to an American Express account tied to William Smith & Associates LLC, funding luxury goods, travel, and personal ventures. 

Smith’s greed wasn’t just about numbers, it financed a life of excess. He acquired a $1.3 million home in Novi, properties in Mexico and Michigan, a 36-foot yacht called the "SS Duo," and even a nightclub. Despite earning no more than $260,000 annually, Smith lived like a high roller, betraying not just his colleagues but an entire community. This was no lapse in judgment but a decade-long betrayal meticulously planned. 

Legal Consequences and Fallout

In November 2024, William Smith pleaded guilty to wire fraud and money laundering, admitting to defrauding the Detroit Riverfront Conservancy of $44.3 million. Each charge carries a maximum sentence of 20 years, with sentencing set for March 2025. U.S. Attorney Dawn Ison condemned Smith’s actions as a “betrayal of trust,” highlighting the wider damage to the community. FBI officials underscored the erosion of public confidence in an organization dedicated to creating shared spaces for Detroit residents. 

Smith’s decade-long fraud has also delayed the Riverwalk project, a cornerstone effort to revitalize Detroit’s riverfront with parks, plazas, and recreational spaces. For a city on the path to renewal, this setback strikes at both progress and community morale. 

Rebuilding Trust and Financial Integrity

The Detroit Riverfront Conservancy is taking swift steps to recover from the scandal and restore its reputation. Key measures include: 

• Strengthening Oversight: Introducing independent audits and stricter financial controls to safeguard against future breaches. 
• Recovering Stolen Funds: Pursuing civil litigation to reclaim the embezzled $44.3 million, though full recovery remains uncertain. 
• Engaging the Community: Maintaining transparent communication with donors and stakeholders to rebuild confidence in the Conservancy’s leadership.

The organization’s role in Detroit’s revival cannot be overstated. Since emerging from the largest municipal bankruptcy in U.S. history, the Conservancy has worked to create vibrant public spaces along a five-mile stretch of riverfront. Despite the scandal, CEO Ryan Sullivan reaffirmed its mission: “We are determined to complete the riverwalk and fulfill our vision of transforming Detroit’s riverfront.” 

Lessons for Nonprofits

The William Smith case highlights critical vulnerabilities in nonprofit financial management. To prevent such betrayals, organizations must implement strong governance practices: 

Segregate Financial Duties: Avoid giving any single individual unchecked control over financial operations. 

• Conduct Regular Audits: Independent reviews can uncover irregularities early. 
• Encourage Whistleblowing: Provide safe channels for employees to report suspicious behavior. 
• Leverage Technology: Use AI-driven tools to detect anomalies in real-time, reducing reliance on manual processes. 

These practices are more than precautions, they are essential to protecting the trust that nonprofits depend on to fulfill their missions. 

Turning Crisis into Opportunity 

The betrayal by William Smith extends beyond financial devastation, it has shaken the Detroit community and stalled the Riverwalk project, a beacon of hope and renewal. However, Detroit’s legacy of resilience presents an opportunity to emerge stronger. By prioritizing transparency, accountability, and community engagement, the Detroit Riverfront Conservancy can rebuild trust and reignite its mission to transform the riverfront into a vibrant, inclusive space. 

This scandal is a stark reminder for nonprofits worldwide: while broken trust is difficult to restore, vigilance and meaningful reform can lay the foundation for a brighter, more secure future. Stay updated with key financial and accounting insights on MYCPE ONE Insight—hit the subscribe button and never miss an update.