May 23, 2024 - Business

Detroit Riverfront Conservancy investigation handed over to FBI

Illustration of a magnifying glass shaped like a badge.

Illustration: Maura Losch/Axios

Michigan State Police handed over its investigation into the Detroit Riverfront Conservancy's finances to the FBI, board chair Matt Cullen said this week.

Why it matters: The FBI's involvement comes just a week after the conservancy forwarded financial records to the MSP and asked for a criminal investigation.

What they're saying: "The state police have advised us that due to the nature and complexity of the situation they have turned the investigation over to the Federal Bureau of Investigation," Cullen said in a statement Tuesday.

Catch up quick: The conservancy recently ordered a forensic audit and sought counsel from the Honigman law firm after Cullen became concerned about the conservancy's financial statements.

  • Cullen directed Honigman to take "evidence of financial wrongdoing" by the conservancy's CFO to the MSP last week, he said.
  • But the FBI is better suited for a long-term white collar case, an MSP lieutenant told the Free Press.
A column chart that displays the annual revenue of the Detroit Riverfront Conservancy from 2017 to 2022. The revenue peaked at 31.4 million in 2019, then dipped to 18.3 million in 2021, before rising again to 25 million in 2022. The lowest revenue was 5.2 million in 2017.
Data: Internal Revenue Service, GuideStar; Note: Includes contributions and grants, program service revenue, investment income and other revenue; Chart: Axios Visuals

The big picture: The nonprofit conservancy has helped transform the city's riverfront from an underutilized post-industrial landscape into an award-winning public attraction over the past two decades.

What we're watching: CFO William Smith was placed on unpaid leave, the conservancy said last week when it disclosed the MSP investigation.

  • Smith did not respond to emails from Axios.
  • He was a finalist for Crain's CFO awards in 2013, having been credited with generating new revenue through creative deals after joining the conservancy in 2006.
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