Detroit Riverfront Conservancy embezzlement probe that might top $40 Million

[Lowell]

This scandal has been percolating for while but these staggering numbers and the allegations against the CFO, his firing, and the resignation of the CEO are new. All very disappointing if proven true.

"The Detroit Riverfront Conservancy’s CEO has resigned and its chief financial officer has been fired amid a criminal investigation into what the organization says is more than $40 million in missing money.

"Financial officer William A. Smith was fired after a Friday vote by the board of the nonprofit, a news release from the organization said. The board also hired Ryan Sullivan, CEO of Great Lakes-focused development and advisory firm Watershed Horizons, to replace CEO Mark Wallace on an interim basis. Wallace will stay on to help the transition."

Mark Wallace [left] and William Smith

"The leadership change comes as the FBI investigates alleged financial mismanagement at the organization responsible for redeveloping more than five miles of riverfront with hundreds of millions of dollars in public, private and philanthropic funds. Conservancy Board Chair Matt Cullen has said an independent audit found “evidence of financial wrongdoing” by Smith.

"The audit found the losses amount to more than $40 million, Friday’s release said. The organization says it will “explore all legal avenues to protect the interests of the riverfront, including a potential civil lawsuit against Smith.”

https://www.freep.com/story/news/loc...0/73927880007/

[401don]

I always find it totally amazing how long and how big these embezzlement schemes go on before they're found out. It was discovered by independent auditors but aren't independent auditors used on an ongoing basis in addition to any internal ones?

[mwilbert]

I always find it totally amazing how long and how big these embezzlement schemes go on before they're found out. It was discovered by independent auditors but aren't independent auditors used on an ongoing basis in addition to any internal ones?

All audits aren't created equal. A normal external audit doesn't actually check to make sure that everything in the accounts matches reality; it doesn't even make sure that everything in the accounts is supported by documentation--it's a sampling process where selected items in the books are checked based upon what the auditors see as the portions of the accounts that look most likely to have issues.

But once people are thinking things are suspicious, they will look harder and may find irregularities that were overlooked previously. Or different auditors may just randomly check different things and find something because they were lucky.

[401don]

All audits aren't created equal. A normal external audit doesn't actually check to make sure that everything in the accounts matches reality; it doesn't even make sure that everything in the accounts is supported by documentation--it's a sampling process where selected items in the books are checked based upon what the auditors see as the portions of the accounts that look most likely to have issues.

But once people are thinking things are suspicious, they will look harder and may find irregularities that were overlooked previously. Or different auditors may just randomly check different things and find something because they were lucky.

I think a good external audit goes much deeper with this amount of money. Either that or he was a genius to cover up 40 million in a relatively small organization like this.

[stasu1213]

I think a good external audit goes much deeper with this amount of money. Either that or he was a genius to cover up 40 million in a relatively small organization like this.

Nah. I wouldn't call him a genius. A so called genius would had never gotten caught or allegedly gotten caught. He probably been under the radar for years but the investigators probably wanted to make sure that all of the t's and i's were crossed and dotted. Maybe now the development of the riverfront could move at a faster pace . Smith is probably not the only one being investigated or involved in this.

[401don]

Nah. I wouldn't call him a genius. A so called genius would had never gotten caught or allegedly gotten caught. He probably been under the radar for years but the investigators probably wanted to make sure that all of the t's and i's were crossed and dotted. Maybe now the development of the riverfront could move at a faster pace . Smith is probably not the only one being investigated or involved in this.

The genius comment was sarcasm. You really think they suspected it and sat on it for years? That's even worse.

[jiminnm]

I always find it totally amazing how long and how big these embezzlement schemes go on before they're found out. It was discovered by independent auditors but aren't independent auditors used on an ongoing basis in addition to any internal ones?

I suspect there are no internal auditors and that the group relied on the CFO to review accounting and the Treasurer to review cash flow.

If you look at their web page, you see very few financial types in any management position. Also, they have a 43-44 member Board. That's way too many to be effective, which makes it likely that they rely on the management of the Conservancy [[which also has an interim CEO) for internal controls.

[Gistok]

They better put a tether on that guy [[and take away his passport)... otherwise he could be on his way to Belize or the Cayman Islands.

[stasu1213]

The genius comment was sarcasm. You really think they suspected it and sat on it for years? That's even worse.

You really have your head in the sand if you think that the embezzaling of millions of dollars went unnoticed until recently. It takes months even years to monitor the origins of incoming and outgoing of funds. Checks and balancing. Pinpointing whom is making transactions and the authorization of them. That’s probably not being taught in marketing class. Smith’s lawyers are probably telling him to lay low and don’t talk to the media.

[EASTSIDER BALDUCK]

Exactly.
Well said.

[Henry Whalley]

...or he was a genius to cover up 40 million in a relatively small organization like this.

It takes a very stable genius.

[Cincinnati_Kid]

Crooks will be crooks. People find ways to steal money in all occupations. Even a former president...

[canuck]

You really have your head in the sand if you think that the embezzaling of millions of dollars went unnoticed until recently. It takes months even years to monitor the origins of incoming and outgoing of funds. Checks and balancing. Pinpointing whom is making transactions and the authorization of them. That’s probably not being taught in marketing class. Smith’s lawyers are probably telling him to lay low and don’t talk to the media.

Maybe, maybe not. Either way, embezzlers look for a comfy situation where they can do their deeds without interference. These kinds of things can go on for years even when suspicion arises and reporting happens. These are large sums because the projected expenses were large. But some small organizations get taken for important sums relative to their size, because not enough potential overseers carry out their duty.

This type of thing happens in Government bug and small, business and religious orgs, it knows no bounds.

[Henry Whalley]

...business and religious orgs, it knows no bounds.

I predict the CFO will become a preacher.

https://www.freep.com/story/news/loc...d/73983545007/

[Zacha341]

...This type of thing happens in Government bug and small, business and religious orgs, it knows no bounds.

Even the tech Gods get hit too!

Former Global-Diversity Facebook exec pleads guilty - defrauding 4 MIL

[1953]

I sit on nonprofit boards; how someone could steal $40 million and have no one notice is beyond me.

1953

[Honky Tonk]

Even the tech Gods get hit too!

Former Global-Diversity Facebook exec pleads guilty - defrauding 4 MIL

Bet she's not smiles anymore...

https://www.latimes.com/california/s...ison-for-fraud

[Gistok]

"A state's attorney sought to impose stricter bond terms on Smith, including a GPS tether and curfew, but Whalen rejected the request, citing Smith's clean criminal record."

How does a 12 year history of graft and corruption in pillaging the Conservancy's money come across as a "clean criminal record"??

It's not that his hand was in the proverbial "cookie jar" once! It was in there repeatedly for a dozen years!!

With that much leeway... he could just make a "clean break" for Belize...

[Henry Whalley]

..."clean criminal record"??

What a shame that white collar criminals are considered not dangerous to society. So, most get light sentences.

The confidence game is an American tradition according to this book.
Confidence Men and Painted Women [[yale.edu)

[canuck]

Even the tech Gods get hit too!

Former Global-Diversity Facebook exec pleads guilty - defrauding 4 MIL

Yes, she seems to have used "diversity as a diversion to divert moolah!!!

[canuck]

I sit on nonprofit boards; how someone could steal $40 million and have no one notice is beyond me.

1953

There was a woman in a small town next to mine who stole from her church funds, dilapidated the cemetery fund to the tune of hundreds of thousands. She was in a house arrest situation for a while and paid back a portion of the stolen funds. Happens all the time.

[Jimaz]

I sit on nonprofit boards; how someone could steal $40 million and have no one notice is beyond me.

1953

I suppose the concealment becomes possible {or appears to become possible} when the proceeds of the theft can fund {in the form of bribes, framing a scapegoat, etc.} the concealment itself?

That's what keep detectives employed trying to unravel such scams.

[Henry Whalley]

Friends of the Riverfront Conservancy should closely watch Judge Whalen's actions vis-a-vis sentencing the accused felon.

[Zacha341]

Exactly! The downfall of such happens due to the moving-parts and or friends-and-families [initially bribed for silence].

As the investigation deepens/ case goes forward they start to 'TELL-ALL' for leniency towards getting the top person!

I suppose the concealment becomes possible {or appears to become possible} when the proceeds of the theft can fund {in the form of bribes, framing a scapegoat, etc.} the concealment itself?

That's what keep detectives employed trying to unravel such scams.

[Zacha341]

She won't be able to divert the social media consequences of not being employable. Or find one of those organizations where you fall-up?

Yes, she seems to have used "diversity as a diversion to divert moolah!!!