Eric Smith formally charged
Former prosecutor charged with federal obstruction related to campaign expenditures
Former Macomb County prosecutor Eric Smith was arraigned Friday on a federal obstruction charge, though he has already agreed to plead guilty to it.
Smith, 53, of Macomb County, appeared remotely by Zoom video in front of U.S. Magistrate Anthony Patti with his two attorneys, Marty Crandell and John Dakmak, at a conference-room table.
A not-guilty plea was entered, but Smith last week stated he will plead guilty to the charge for trying to get potential witnesses to lie for him regarding his alleged illegal use of $75,000 in campaign finance funds.
Smith agreed to a probable sentence of between 15 to 21 months in prison. The two sides were unable to agree on a fine, which could be up to $250,000, though
Smith agreed to pay $70,000 in restitution.
A plea hearing date was not set.
During the 10-minute hearing, Smith provided brief replies to questions from
Patti.
Smith was arraigned “on the information” by Patti and waived his right for a grand jury to indict him. He also waived his right to appear in person.
He is free on an unsecured $10,000 bond.
Patti ordered Smith to give up his certified pistol license and must turn in any firearms to federal officials by next Friday.
While on bond, he cannot leave
the state unless approved by Pretrial Services or the magistrate or judge, Patti said.
Assistant U.S. Attorneys Michael Bullotta and Robert Moran also attended.
U.S. Attorneys on Sept. 9 revealed allegations that Smith told two assistant prosecutors and a friend to lie when questioned by federal authorities about his use of campaign funds.
Smith devised a scheme in January 2012 to steal money from his campaign fund by false pretenses, according to U.S. attorneys. Over the next seven years, he wrote checks totaling $55,000 from the campaign fund account to be paid to his friend, known as “Person A,” supposedly for rent payments of the friend’s Shelby Township office for Sunset Homes, that was being used for Smith’s campaign.
But instead of being used to pay for rent, authorities said, the checks were cashed at “Person A’s” bank and the full amount was kicked back to Smith for his personal use. Smith later asked that individual to tell federal investigators the money returned to Smith was actually a loan he intended to repay.
After learning he was under federal investigation, Smith in February met with Assistant Macomb Prosecutor Josh Van Laan in a stairwell of the county Administration Building. He asked Van Laan to lie to investigators by saying he had conducted campaign-related research at the Sunset office to justify the purported campaign “rent” payments, authorities said.
Van Laan notified law enforcement officials. Van Laan is not the subject of a criminal investigation.
In another alleged scheme, Smith earlier in February met with another one of his employees, Assistant Macomb Prosecutor Paul Bukowski, also in a stairwell. Smith had Bukowski help create a fake contract with a consultant company, Code Red Political Consulting, to justify $20,000 that Smith stole in 2016 from his campaign fund, authorities said. Of the $20,000, Smith gave Bukowski $5,000 and kept the remaining $15,000 for his personal use, records show.
Bukowski has not been
criminally charged but was suspended with pay Monday by the county and is under investigation for discipline up to termination.
Smith also faces criminal allegations by state Attorney General Dana Nessel that he illicitly spent $600,000 from a “slush fund” he maintained in obscure forfeiture accounts from 2012 to 2018. Nessel says Smith spent money on personal expenses or items to benefit him instead of for law enforcement purposes as required.
He was charged last March with 10 felonies, including five counts of embezzlement by a public official, and one count each of operation of a criminal enterprise, official misconduct in office, tampering with evidence in a civil proceeding, accessory after the fact and conspiracy to commit forgery. The most serious offense is punishable by up to 20 years in prison.
Smith, who served nearly four four-year terms, resigned three days after his state arraignment. Two former top assistant prosecutors also were charged in the case around the same time.
Ben Liston, who retired in 2018 as chief of staff, was originally charged with four felonies — two counts of embezzlement by a public official, both 10-year offenses, and one count each of conducting a criminal enterprise, a 20-year offense, and misconduct in office, which carries a five-year sentence.
On Thursday, Liston pleaded guilty to three misdemeanors and agreed to a two-month jail sentence in exchange for his testimony against Smith. He admitted to being reimbursed for the purchase of laptop computers, sound equipment and travel expenses to a second home in Arizona.
Liston’s sentence will take place following the resolution of Smith’s case.
Suspended Assistant Macomb Prosecutor Derek Miller has been charged with misconduct in office and conspiracy to commit a legal act in an illegal manner, both punishable by up to five years in prison. Miller, until his suspension, had been chief of operations for two years.
Also charged is Macomb Township businessman William Weber, who allegedly supplied a security system for Smith’s home. He faces charges of forgery, a 14-year felony, as well as larceny by conversion in an amount of $20,000 or more, aiding and abetting Smith’s alleged embezzlement by a public official, and receiving and concealing stolen property, all 10-year offenses.
Smith, Miller and Weber face an Oct. 9 probable-cause conference in 41B District Court in Clinton Township.