CFO Accused of Embezzling $40 Million from Detroit Riverfront Conservancy

The former chief financial officer of the Detroit Riverfront Conservancy is being accused of embezzling $40 million from the nonprofit organization over a period of more than 11 years. William Smith was recently charged with bank and wire fraud after allegedly stealing millions of dollars and spending it on airline tickets, hotels, luxury goods, real estate and more. He has since been replaced and the organization is reportedly working to recover its funds.

While the conservancy is moving forward with ongoing riverfront projects, the news is “absolutely reverberating” among other nonprofits, according to reports, and experts are weighing in on steps that might have prevented the loss or exposed it sooner.

“When these are well-respected members of the community, you just kind of trust that they are doing the right thing,” said Connor Cahill , Broker, Professional Liability, Burns & Wilcox , Minneapolis, Minnesota. “When they take advantage of that trust is when you get into hot water.”

Embezzlement losses can be covered by a nonprofit organization or business’s Crime Insurance, while subsequent claims over mismanagement or lack of oversight could trigger coverage under an organization’s Directors & Officers (D&O) Insurance.

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