Detroit Riverfront Conservancy requests maximum prison sentence for ex-CFO
William Smith is to be sentenced Thursday following his guilty plea in November to wire fraud and money laundering. Prosecutors have recommended he serve 18 years, while Smith's lawyers are seeking a sentence of 12.5 to 15.5 years.
'Smith did not simply steal money from a non-profit; he stole from volunteers and used that money for excess, flamboyance, and greed,' conservancy lawyer Matthew Schneider – himself a former top federal prosecutor – wrote in a letter Monday to U.S. District Judge Susan DeClercq.
More: Feds seek 18-year prison term for ex-Detroit Riverfront CFO William Smith
More: 'Ashamed' and 'remorseful': Lawyers for ex-Detroit Riverfront CFO ask court for leniency
Smith began siphoning money from the nonprofit, which was tasked with renovating the Detroit riverfront, in 2012. That was shortly after his promotion from fiscal analyst to CFO. The theft continued into March 2024, when the nonprofit's leaders said they first noticed cash flow issues.
Prosecutors have detailed lavish spending by Smith including $3.7 million in wire transfers to a mistress, $500,000 in Pistons floor tickets, and nearly $200,000 to charter a private jet and yacht.
Schneider's letter to DeClercq details additional alleged spending that includes the laundering of $4.3 million to Smith's now shuttered night club, Duo Restaurant and Lounge, in Southfield. According to the letter, Smith used conservancy funds for restaurant supplies, work uniforms, and bulk liquor orders in the thousands of dollars.
Smith also donated to community causes and GoFundMe campaigns with conservancy money, the letter says. "In what can only be described as the ultimate act of hubris," he made one donation to the conservancy itself, contributing $10,000 to the 2017 Shimmer on the River gala via an American Express card whose balance he later paid with a wire transfer from the nonprofit. Smith even sent himself a thank you letter for the donation, Schneider said, 'presumably so he could claim his payment as a charitable donation on his tax filing.'
Funds for the nonprofit come from philanthropic, public and private sources.
In requesting a lighter penalty for Smith, defense attorneys have said he's remorseful and they highlighted his cooperation with investigators.
But Schneider rejects that characterization, alleging that when confronted about the missing money in March 2024, the then-CFO lied about his involvement for weeks – first to board chair Matt Cullen, then an outside consultant the nonprofit hired to investigate, and, finally, an 'extremely upset' major donor whose organization had given the conservancy millions.
By late April, Smith took a leave of absence and started transferring assets, prompting a judge to eventually freeze them.
Smith has agreed to pay at least $44.3 million in restitution, but prosecutors expect to recoup as little as $2 million from all of his seized assets, per a February court filing.
Schneider's letter also includes comments from about a dozen anonymous "victims" affiliated with the conservancy.
One, from an unnamed board member, says the actions of Smith, who is Black, will prevent other Black people from succeeding.
'I can only begin to tell you the negative impact that has resulted in the Black community,' the statement says. 'Mr. Smith's actions give those who want to find a reason not to provide equal opportunity an excuse to avoid providing access to executive positions, jobs, contracts.'
Another anonymous board member statement says Smith 'has single handedly diminished Detroit's and the Conservancy's reputation.'
'Just when Detroit is getting accolades as the No. 1 Riverwalk in the United States three years in a row, for the revitalization of the city, and for the NFL draft, Mr. Smith's scandal has put us in a negative light,' it says.
The more than 40-member conservancy board is made up of the region's top political, business and philanthropic leaders. After details of the theft were revealed last year, nonprofit governance experts highlighted a range of apparent red flags at the organization, including Smith's sole access to a conservancy checking account, a lack of board scrutiny of his business dealings, and the board's use of the same auditor for more than a decade.
More: Experts review how Detroit Riverfront Conservancy could have missed alleged $40M fraud
Violet Ikonomova is an investigative reporter at the Free Press focused on government and police accountability. Contract her at vikonomova@freepress.com.
This article originally appeared on Detroit Free Press: Detroit Riverfront Conservancy seeks max sentence for stealing CFO
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Business Insider spoke with eight current and former Chipotle employees in four states whose tenures span from 2012 to the present; four of them have been involved in union organization efforts. Each told the same story, resonant with the broader allegations and superlatives: Many of the qualities that made Chipotle stand out as an employer — offering a stellar working experience where they were well-trained and valued and able to offer customers a high-quality experience — have precipitously declined. For a fast food brand, Chipotle has lofty values. "Our purpose is to cultivate a better world," its website states. It has long prided itself on offering only fresh food — it doesn't have freezers at its restaurants, a rarity in an industry where the majority of ingredients are frozen. It also makes promises to its employees. "Being real means treating our people right," reads the company's mission statement. 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At the Augusta store, McNease says, "It was pretty clear that what I had stepped into was a transition period that was not going in the right direction." New hires started to be put on the floor with no training, she says. "It got to the point where you were lucky if you got to watch videos." The same was happening in Kansas, as new hires wouldn't know how to do important tasks, Muller says. Thomas started working at the same Chipotle in 2022 (he also asked that I use a pseudonym). By the time he left in late 2023, he says he consistently had to correct employees on food safety procedures. In her statement, Schalow says the company's current training program "includes food safety training, workplace and employment-related training, and a range of operational training for various roles." When Schneider first started, there was a strict rule enforced that no one under 18 could use a knife; later on, kids as young as 16 were doing that prep work, he says. 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Kristen Harknett, another principal investigator, says that canceled shifts are "extremely disruptive," particularly for workers who show up to a shift only to be sent home without receiving any pay. In Kansas, managers put up a printed schedule once a week on Saturday night or Sunday, say Schneider and Muller. There was no way to access it online; if someone didn't work that day, they might not know they were supposed to show up the following one. At the Maine store, workers sometimes wouldn't have their schedules by Sunday and would be told to show up to whatever shifts they had been scheduled for the previous Monday, says McNease. All the workers Business Insider spoke to also say that staff was so lean that employees on any given shift weren't able to handle the crush of customers, and that many shifts were chaotic. At the Augusta Chipotle, Smith says, "It went from awesome and well-staffed to a skeleton crew in like a month." 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Employees blame the hecticness, in part, on climbing turnover rates. In 2016, the rate was 130%, according to the company. By 2021 it had swelled to 194%, meaning nearly twice as many people left as were employed there that year. Rates have fallen since then, clocking in at 145% in 2023 and 131% last year. "We firmly believe in consistent and predictable scheduling and providing our employees with sufficient advanced notice of their schedule," says Schalow. "Our staffing levels are the best they have been in recent years, and we continue to see record low turnover rates in our restaurants." The issues have trickled down to customers, who workers say have had to wait in longer lines or forgo ingredients that couldn't be cooked and prepped in time. Last year, after a chorus of customers accused the company of skimping on portions on TikTok, a Wells Fargo restaurant analyst ordered and weighed 75 iterations of the same item at eight locations across New York City — and found a lot of variation. Niccol denied there was any directive to offer smaller portions, and announced training to ensure consistent amounts across locations — although not before a shareholder lawsuit over the matter. "We have not changed our portion sizes, and we have reinforced proper portioning with our employees," says Schalow. "If we did not deliver on our value, we want our guests to reach out so we can make it right." More and more often, customers get nasty with employees. "We'd get yelled at, screamed at," Anna says. "It got so much worse as the years went on." In response to the portion-skimping allegations, customers have taken to filming workers as they make their burritos. It made employees "really uncomfortable to have cameras in our faces while we were working," Thomas says. "People were very rude about it." Schalow at Chipotle says, "We do not condone guests who mistreat our teams and fail to give them the respect they deserve." "A lot of people would lash out," says Smith. "It got really dehumanizing." Anna, who had at one time loved her job so much she planned to stay as long as she could, says that the job became so disorganized and overwhelming that she quit after eight years with the company. In April's earnings call, Boatwright also noted that employees were "not as friendly as we probably should be in restaurant." His solution: Urging them to greet customers with a friendly smile. "The fact is," he said, "smiles down the line don't slow us down." In recent years, a number of Chipotle workers around the country have decided to organize. In New York, Leslie was approached by SEIU 32BJ, a union that organizes primarily low-wage workers like cleaners and food service workers. She had previously been in a union while working at a nursing home, and she liked the idea of having one at Chipotle, too. Chipotle did not agree, she says. "I'll tell you one thing, Chipotle hates the union," says Smiling Estrella. After he was on the news for attending a protest in New York, Chipotle accused him of forcing someone to work during his unpaid break and making employees clock out before working to close up the store. He denies it, calling the accusations "lies." In early 2023, he was fired. "That was really freaking hard," he says. "I went through a deep depression." He nearly lost his apartment as he struggled to make rent, and his phone service was cut off twice. In 2023, Chipotle was hit by seven unfair labor practice charges in New York City, the most of any employer. There are four open charges against the company sitting with the federal National Labor Relations Board for alleged behavior such as unfairly disciplining and threatening workers. Workers at a Michigan location prevailed in forming a union. In 2022, employees at a Chipotle in Lansing overwhelmingly voted to join the International Brotherhood of Teamsters to address what they said were similar issues of understaffing and inconsistent schedules. The workers say they were barraged by captive-audience meetings and anti-union messaging; the NLRB found the company had violated labor law by trying to deny raises to the unionized workers. They are, to date, the only unionized location. More than two years later they don't have a contract. No other union campaign has succeeded. In March 2022, the "wheels started to fall off" at the Augusta location, McNease says. She had been trying to do training "correctly," but struggled, particularly as people kept quitting. A gas leak in the restaurant started making people sick, and it took the company weeks to send someone out to fix it, she says. That's when she got in touch with someone she knew who was in a union to find out more about the process. The first step, she was advised, was to talk to coworkers about forming a union. "It immediately just took off," she says. Employees were primed for it. "We were just tired of corporate not listening to us. We were literally begging for help," Smith says. On June 15, McNease sent an email on behalf of her coworkers to the restaurant's team director, laying out their demands. It said that, since the previous December, the store had gone without training for new or existing employees, that two workers had been "routinely expected" to complete the prep tasks usually done by six, and that three or four people had to open the store, work that required seven people. These issues put not just employees but customers at risk, with food safety "compromised," McNease wrote. If the company didn't schedule a "full crew" to open the store by the following morning, the letter said, they wouldn't show up to work until they had enough staff and training. That kicked off a two-day walkout. Six days later, the workers became the first Chipotle location in the country to file for a union election with the NLRB. "Management descended on us immediately," McNease says. Employees were called into mandatory meetings that were filled with anti-union rhetoric. The company made new hires that diluted the organizing unit, McNease says; managers screamed at people and overloaded supporters with tasks. People were sent home for slight uniform infractions and fired for "stupid reasons," Smith says. Then, on the same morning that the workers had an NLRB hearing to set an election date, Chipotle sent employees notice that it was shutting the store down permanently. "It was like the rug had been pulled out from under us," McNease says. Workers settled with the company, receiving a total of $240,000 in back pay. "We fought so hard," McNease says, "and in the end, they were able to just walk away." "We respect our employees' rights to organize under the National Labor Relations Act and are committed to ensuring a fair, just and humane work environment that provides opportunities to all," says Schalow. "We closed our Augusta, Maine restaurant because of location-specific staffing challenges of this fairly remote location and other issues, not because of any union activities of the employees there." Muller started talking to her coworkers about unionizing around the time McNease's campaign faltered. She drew up a petition for the NLRB and quickly got most of her coworkers to sign. After management found out in October 2022, the company deployed similar tactics as those in Maine, she says. 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After looking for the proof first (she said she would send it to me but didn't) in his iPad and old phones, I saw messages, naked pictures, and videos from several women spanning the entire relationship. Several of these women were previous friends of his, who were 'like family,' and were at our wedding. Some even used to be friendly with me at friends' events." "After a few years, he wasn't the best husband in terms of how he treated me, but I never had a clue because he was always on time and never did anything to cause suspicion. He was cheating at work, on lunch breaks. He was calling women for quickies before going into the office, visiting strip clubs on lunch breaks, meeting up with women while out walking our dog late at night, while I put the children to bed, and texting them when I was in the shower or after I'd gone to bed. We have three children, ages six and younger, with one on the way (found out right after the scandal). I canceled going to our marriage counseling meetings (where he only wanted me to take responsibility for the marriage and his treatment towards me) and filed for divorce anyway." —Anonymous 8."The guy I had been long-distance dating for almost five years had gotten someone else pregnant and married her. The kicker was that she's the one who emailed me from his email account to tell me. Still haven't spoken to him about it to this day. They have three kids now, and I have a 3.5 carat diamond ring from a super awesome man!" —Anonymous 9."My wife of 20 years went to a Friendsgiving the day before Thanksgiving Day. She never came home. She called me at noon on Thanksgiving Day to tell me she was on her way home and that she had passed out at her friend's house. I was suspicious. A month later, I woke up in the morning to go to work and found her phone in her purse still on. Before the battery died, I was able to go through it and discovered she left the Friendsgiving that night to hook up with a random dude she just met. I had to endure reading the text messages of my wife, with whom I share two children, communicating with her friend about the man's penis size and color. All while her husband and children were asleep at home. I left her that very same day. All she could say was sorry." —Anonymous 10."My ex-husband spent the last two years of our 10-year marriage actively sleeping with one of my very best friends. She came clean when she realized that he had manipulated and gaslit both of us into believing his BS excuses. He told her I had firmly stated I wanted zero information regarding their situationship. Meanwhile, he had me convinced that he was not attracted to her in any way because he viewed her as a sibling, and it disgusted him to even think about having relations with her. I left in 2020 and never looked back. Divorce was worth every penny." —Anonymous 11."My ex lied about everything. He invented an entire false backstory of hardship and tragedy, like almost making the NHL before a knee injury ruined his dreams, rehabbing that injury enough to sign a contract as a professional mountain bike racer, and then in the very next race, crashing and shattering a vertebrae and ruining his ability to play any sports again. He has stories about traveling around South America and being arrested and extorted by police, about a job he worked on production for a Spice Girls tour in Europe, and where Geri Halliwell kissed him at the tour wrap-up party, about his time in the Coast Guard, and various heroic rescues he had pulled off. The most egregious lie was that he had survived bowel cancer. I'm a nurse, and everything he told me about his recovery, treatments, and medications was exact. He had literally studied cancer treatments and memorized the names of chemo meds." "We had a baby together, and he was horrible to me in my pregnancy and postpartum. He body-shamed me, degraded and humiliated me in front of strangers under the guise of 'joking,' and even poured out my pumped breast milk and screamed at me when I would breastfeed so that my son had to be formula fed. He was away at sea in the Coast Guard when our child was 4 months old. He had borrowed my laptop to work on a course and left it signed in and synced with his phone. I could see in real-time as he and a woman exchanged nudes. I found out he had cheated on me during my pregnancy with 10-15 women. I had suspected it because he was averse to any intimacy at all during my entire pregnancy, but there was now plenty of evidence. I called his sister and started telling her about things, and she confirmed that his backstory was lies he'd told many people, and they had a very privileged childhood. He had constantly been on social media talking to other women, but he would say that it was a friend's girlfriend, cousin, or coworker. But it turned out that they were all women he had slept with or was cheating on me with. He was telling these women all sorts of lies about me to make me seem like a monster, but they all knew about me, the pregnancy, and the baby. That one really hurt. When I contacted the women, they seemed mostly mad about the *other* women he was involved with. They all thought they were something special to him. He came home from the sea, and for two weeks, I tried to figure out how to move forward. He ended up sexually assaulting me (it took me a long time to figure it out because I had wanted intimacy from him for my whole pregnancy, and now that I didn't want it, he forced it, and tried to convince me that I actually wanted it, and I was in the depths of postpartum depression hell). He finally told me he would not stop having other women in his life. I kicked him out, and he called child services and made up a bunch of lies about me, spread rumors about me around my workplace to try to ruin my career, and canceled about 50% of his parenting time to go get drunk and sleep with strangers during the pandemic. I've spent about $70k on legal bills and following court orders to try and get some semblance of peace in my life. He is now married to one of the women he cheated on me with, and the week before they announced their engagement, he came to me and said he just wanted to be a family again and asked me to give him a chance, so I doubt she's being treated any better than I was. I now have to try to co-parent with them, and I have a diagnosis of PTSD from the sexual assault and everything he did to us. I wouldn't wish this on my worst enemy. I try to put it all aside for my son's sake, but I also want to protect him from how my ex will eventually use, abuse, and discard him, just like he's done with everyone in his life. They didn't even invite him to their wedding, and it seems they basically trot my son out for photo opportunities or to try and hurt me." —Anonymous 12."One month after we got married, I found cards from the woman he had been cheating with for the entire three years we had dated before marriage." —Anonymous 13."He was having an affair with our son's girlfriend (the mother of our grandchildren)." —Anonymous 14."Got engaged and moved 1,900 miles away to be closer to her parents. For some reason, she was always combative. I was working three jobs to support us and her kid. In February, she went back to visit her friends. A few months later, I found a note from her best friend's husband saying how much he enjoyed the sex and couldn't wait for it to happen again. I didn't mention the note, but asked her if she wanted to break up. Thankfully, she said yes." —Anonymous 15."He moved across the country with me. I never asked him to because I wanted to focus on school/my career path. He was kind of floating around in life, which is fine, no judgment. But I've never met anyone who had no edge or ambition. Any logic/advice I gave went in one ear and out the other. I made it clear he'd need a game plan, like learning a trade, going to school, or getting a job. I was supportive of his new possible opportunities. He had no savings; his parents paid for his rent, groceries, and brand-new cars — hence the lack of ambition. It always stumped me how it was 'all words, no action' while having a pity party for himself. He was in his early 20s. I felt like a therapist, mom, and life coach all in one. So many things bothered me. He'd talk shit about his family and only hit up his mom for money. His insecurities were through the roof." "One of the small gigs he had, I remember he got upset that his coworker corrected him. He decided to describe her using very derogatory language. The final straw was when I picked his mom up while he was at work. She asked how I liked the new apartment. I was confused because I'd been living in the same place for over a year. She was told that we moved to a bigger place last week. For whatever reason, he lied on both sides. So he lied to them about where he lived and led me to believe they were in the loop. Like multiple full-on conversations about money differences for a bigger place. The level of disrespect sent me through the roof. Waste of time and energy is an understatement. Covert narcissism at its finest." —Anonymous 16."I found out that my ex was sleeping with the barmaid in our local bar behind my back. I realized this when he called me her name during sex one time. She had a very unusual name. Safe to say he got dumped, and I don't drink in that bar anymore." —Anonymous 17."I dated my ex-husband for two years before marrying him. I found out a couple of months later that I was his seventh wife and he had five kids, each child with a different woman!" —Anonymous "I had long suspected her infidelities, but having three children with her had me working two jobs and doing more than my share for the betterment of our family. I even had a guy at a bar ask me if he could date my wife, knowing everything about her, and to my surprise, even about me! That was traumatic. It turned me into an alcoholic just to forget. Months later, she left on a 'business trip.' This time, though, she didn't use a rental car, but borrowed her sister's car to travel and fly out of another city. I never thought anything of it, but the second night, I sat at the computer and once again noticed her email password under the keyboard. I took it as a sign, and upon opening her account, I saw the messages between her and her other boyfriend she met on a plane ride for work, which detailed their fling in New Mexico. That was 22 years down the drain." "I was devastated and couldn't sleep the whole night. The next day, I went to tell my mother-in-law that I couldn't support her lies and deceit any longer. She understood and said she was sorry. That experience changed me for the better. I've found it hard to love someone again, but at least our children love me and appreciate all that I did and continue to do for them. Call me an optimist! Someday, I'll find the one who will fill my heart again." —Anonymous Have you ever been betrayed by a partner? What did you learn that ended the relationship for good? Tell us in the comments or share anonymously using this form. If you or someone you know has experienced sexual assault, you can call the National Sexual Assault Hotline at 1-800-656-4673 (HOPE), which routes the caller to their nearest sexual assault service provider. You can also search for your local center here. If you or someone you know is in immediate danger as a result of domestic violence, call 911. For anonymous, confidential help, you can call the 24/7 National Domestic Violence Hotline at 1-800-799-7233 (SAFE) or chat with an advocate via the website.
