Detroit Riverfront Conservancy fires CFO amid financial investigation by FBI
(CBS DETROIT) - The Detroit Riverfront Conservancy fired embattled Chief Financial Officer William Smith on Friday. Smith is currently the subject of an FBI investigation.
The nonprofit's Chief Executive Officer, Mark Wallace, also resigned but will remain with the group as an advisor during the transition. Ryan Sullivan was hired as an interim CEO.
Smith was placed on unpaid leave in mid-May after discrepancies in financial statements were discovered in April. The nonprofit's board ordered investigations by the auditing firm, PwC, and the Honigman Law Firm. The group asked former U.S. Attorney Matthew Schneider, who leads Honigman Law Firm's investigators, to bring evidence against Smith to Michigan State Police and request a criminal investigation. The FBI has since taken over the investigation because of its complexity.
A letter sent by Schneider to Smith's attorney, notifying them of the board's intention to fire Smith, states, "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."
According to the Detroit Riverfront Conservancy, the two independent investigations estimate the loss to the nonprofit to be more than $40 million.
"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 statement. "That belief was disabused by the recent discovery of this significant financial crime."
The nonprofit recently hired Quatrro Business Support Solutions to oversee day-to-day accounting and finance functions.