Former CFO of Detroit Riverfront Conservancy and government seek sale of Southfield nightclub

Federal prosecutors and lawyers for former Detroit Riverfront Conservancy CFO William Smith are seeking to sell the assets of Smith’s Southfield nightclub, a move that could recoup some of the roughly $40 million allegedly stolen from the nonprofit, according to a court filing Thursday.

U.S. District Judge Kay Behm signed an order allowing the U.S. Marshals Service to enter the Duo Restaurant & Lounge to inspect, photograph and evaluate the property.

“This will advance the parties’ mutual goal of agreeing to a sale of the Duo Restaurant and Lounge on agreed terms to be approved by the court,” Behm wrote.

The potential sale is part of a broader asset liquidation that could help recoup money that prosecutors say Smith stole from the Riverfront Conservancy, which has led the revitalization of Detroit’s riverfront for years. Smith is accused of bank and wire fraud, crimes for which he could face 30 years in federal prison, and he is negotiating a possible guilty plea.

The judge’s order is the latest legal development involving Smith, 51, who was arrested in early June and accused of stealing nearly $40 million from a nonprofit organization run by some of the region’s top financial and business figures and funded by Southeast Michigan’s leading charities. The organization’s mission is to provide access to Detroit’s International Riverfront and rehabilitate a more than five-mile stretch from the Ambassador Bridge nearly to Belle Isle.

The nightclub was a side business for Smith and a key part of his business portfolio, which also included a planned cigar bar on Detroit’s riverfront. The lender of that $3.3 million project said last month it could foreclose on the property after Smith failed to start construction.

State corporate records list Smith as a managing member of Duo as early as 2016. The nightclub’s website touted its ambiance and “chic and sophisticated industrial-style setting.”

The nightclub is located in a plaza on Northwestern Highway, near Inkster Road, between a comedy club and Woof Woof, a dog boutique. The duo’s landlord, Tony Curtis, did not immediately respond to requests for comment Thursday.

And yet, state records show that despite its small size, Duo Restaurant & Lounge sold more alcohol ($868,051) last year than nearly any other bar, restaurant or concert hall in Michigan, with the exception of Little Caesars Arena ($1,186,551) and Detroit sports bar Brass Rail ($880,894), according to sales data from the Michigan Liquor Control Commission.

Duo’s sales exceeded those of much larger venues such as Ford Field, Comerica Park and the Topgolf Driving Range along Interstate 75 in Auburn Hills.

However, the liquor business dried up and the duo was shut down in the wake of the scandal. The Michigan Liquor Control Commission has suspended the nightclub’s liquor license, an action taken when a venue “fails to maintain liquor liability insurance,” commission spokeswoman Abby Rubley told The Detroit News last month.

The criminal case accuses Smith of using an American Express platinum credit card to make $14.9 million in illegal purchases, including airline tickets, clothing, jewelry, furniture and $17,453 at Louis Vuitton.

Smith is also accused of transferring $24.4 million from a conservation account to one of his companies, Joseph Group & Associates.

Last month, officials with the Nature Conservancy sued Smith, his mother, his wife, his sister and the best man at his wedding on Wednesday, accusing them of conspiring to steal nearly $40 million from the nonprofit.

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@robertsnellnews

Editors Kalea Hall and Louis Aguilar contributed.

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