News Summary
Duo Restaurant and Lounge in Detroit has been sold for $155,000 following a $44.3 million embezzlement scandal involving former CFO William Smith. The sale includes essential assets such as liquor licenses and equipment. The proceeds will be held in escrow linked to Smith’s ongoing criminal case, with expectations to assist the Detroit Riverfront Conservancy. As the community awaits the future of the venue, concerns arise over the limited recovery of misappropriated funds. Smith is set for sentencing on April 24 after pleading guilty to fraud and money laundering.
Detroit’s Duo Restaurant and Lounge Sold Amid Embezzlement Scandal
Detroit is buzzing with some shocking news as a federal judge has officially given the green light for the sale of Duo Restaurant and Lounge, a popular nightclub once owned by the former CFO of the Detroit Riverfront Conservancy, William Smith. This sale comes in the wake of a jaw-dropping $44.3 million embezzlement case that has captured the city’s attention.
Sale Details and Assets
The assets of Duo Restaurant are on the auction block, with a selling price of $155,000. This includes the nightclub’s invaluable liquor licenses, alcohol stock, and all the furniture, fixtures, and equipment that Smith owned but not those rented from the landlord. The judge’s approval is a significant step as it allows the long-closed nightclub to move towards a new chapter while somberly reflecting the circumstances that led to its closure.
The Man Behind the Scandal
William Smith found himself in serious legal trouble last year after being arrested for allegedly stealing a staggering amount from the Detroit Riverfront Conservancy over a 12-year period. The funds were meant for vital revitalization projects along the industrial riverfront that have been a focal point for locals and visitors alike. His fraudulent behavior has caused substantial damage, and the fallout continues to ripple through the community.
Where Are the Proceeds Going?
U.S. District Judge Susan DeClercq has taken steps to ensure that the proceeds from the sale will be handled responsibly. He has ordered that these proceeds be placed in escrow until Smith’s criminal case concludes, with expectations that they will eventually benefit the Detroit Riverfront Conservancy. After deductions for any taxes and assessments owed by Smith’s company, YBE Food Group, these funds will then be deposited with the U.S. Marshals Service.
Reality of Recovery
It’s worth noting that it appears the Detroit Riverfront Conservancy may only see a fraction of the funds that were misappropriated. Investigations into this bewildering case have revealed that the assets seized during the investigation are valued significantly lower than the amount stolen. Prosecutors estimate the government might be able to reclaim only around $2 to $3 million from all the seized properties, mainly due to the burdensome mortgages attached to various real estate assets, including Smith’s $1.5 million mansion in Novi and a 36-foot yacht named “SS Duo.”
The Future of Duo Restaurant and Lounge
As of now, Duo Restaurant and Lounge has been shuttered since the fraud allegations came to light, and its liquor license hit a snag due to the inability to maintain necessary liquor liability insurance. It was once recognized as one of the highest liquor-selling locations in Michigan, with sales totaling an impressive $868,051 in 2023 alone. The community is eager to see how this sale will impact the local dining and entertainment scene moving forward.
Looking Ahead
The Detroit Riverfront Conservancy plays a vital role in facilitating access and redevelopment efforts for the city’s riverfront, which has been pivotal since the city’s bankruptcy. CEO of the Conservancy expressed a desire for actions that aim to recover the stolen funds, emphasizing the commitment to revitalizing the riverfront for the benefit of the community.
Looking ahead, Smith is scheduled for sentencing on April 24, where he will learn his fate following guilty pleas for wire fraud and money laundering. The outcome will undoubtedly be closely watched as Detroit grapples with the aftermath of this financial scandal.
Cities have a way of bouncing back, and surely, the story doesn’t end here. Will new ownership breathe fresh life into Duo Restaurant and Lounge? The community waits with bated breath to see how this chapter unfolds.
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Additional Resources
- Detroit News: Ex-Detroit Riverfront CFO Loses Nightclub
- Wikipedia: Embezzlement
- Crain’s Detroit: William Smith’s Duo Restaurant Chapter
- Google Search: Duo Restaurant Detroit
- Detroit Free Press: William Smith Court Records
- Encyclopedia Britannica: Financial Crime
- Deadline Detroit: Checks and Balances
- Google News: William Smith Detroit
