The criminal complaint alleges that Smith carried out his embezzlement scheme in two distinct ways: First, he is alleged to have used conservancy funds to pay for charges that he and his family accrued on an American Express account. Second, federal authorities allege he diverted conservancy funds to a company he controlled called “The Joseph Group.” The company was not an approved vendor of the conservancy board, nor did it provide any conservancy services.
According to the complaint, in January 2013 Smith used a credit card to purchase airline tickets for himself and others, pay insurance premiums and made significant clothing and jewelry purchases, including $4,850 worth of men’s wear from Revive in Birmingham and $5,618 in jewelry from Diamonds Direct in Southfield. Other charges in March 2013 ranged from more than $12,000 at a Chevrolet dealer and over $17,000 from Louis Vuitton.
Bank statements showed that on March 14, 2013, Smith made a $96,000 payment from the conservancy’s Comerica bank account to his American Express account.
That June, he allegedly used more than $22,000 of conservancy funding for his personal residence, including lawn care services and items from The Home Depot, Art Van Furniture, Wayfair and Scott Shuptrine, the complaint adds.
To cover up his alleged acts, according to the complaint, Smith doctored bank statements that he is then accused of providing to the conservancy’s accountant for entry into the nonprofit’s accounting software.
These false bank statements led to erroneous financial information being entered into the DRFC’s books, thereby concealing the fraud,” the Wednesday news release notes.
In 2023, Smith is alleged to have obtained a $5 million line of credit with Citizens Bank on the conservancy’s behalf – a line of credit he was not authorized to take out.
The bank asked Smith for documentation confirming that Smith, as CFO, had the sole authority to obtain such a line of credit on behalf of the conservancy. Smith is alleged to have provided the bank with a document purporting to establish that he was empowered by the conservancy’s Board of Directors to obtain such credit lines.
That document, according to the complaint, was false, and bore the forged signature of the conservancy’s corporation secretary.
Smith was CFO of the conservancy from 2011 until he was fired in late May. The nonprofit is funded by a combination of public and private dollars.
