David Smith Sentenced to 3 Years’ Probation, Must Pay Over $250,000 in Restitution and Fines
Syracuse – Attorney General Barbara D. Underwood today announced the sentencing of David R. Smith, former President of SUNY Upstate Medical University, following his guilty pleas in September, for abusing his position as President of Upstate by using several methods to illegally increase his pay. On September 24th, Smith pleaded guilty before the Honorable Vanessa E. Bogan in Syracuse City Court, to three counts of Official Misconduct in violation of Penal Law § 195.00(1). Today, in accordance with his plea agreement, Smith was sentenced before the Honorable Rory A. McMahon in Syracuse City Court to three years of probation, the terms and conditions of which include that Smith must pay over $250,000 in restitution to his victims and fines.
“We have zero tolerance for those who shamelessly abuse their positions and violate the public trust in order to line their own pockets. That’s exactly what David Smith did – and now he’s paying the price,” said Attorney General Underwood.
From approximately September 2006 to November 2013 when he resigned, Smith was the President of SUNY Upstate Medical University (“Upstate”), in Syracuse.
A joint investigation by the Attorney General’s Office and the Inspector General’s Office revealed that Smith’s initial compensation was negotiated by the then-SUNY Chancellor, followed by approval from the SUNY Board of Trustees. Following Smith’s appointment as President of Upstate, he knew that he was required to obtain approval from the SUNY Chancellor prior to receiving any raises or other increases in his compensation.
“This defendant exploited his university’s lax oversight with cynical and thieving schemes to pad his own income,” said New York State Inspector General Catherine Leahy Scott. “He shamelessly violated the trust of his position, prioritizing his own illicit financial gains over patient care and medical education that should have been his primary concerns. Through new leadership and findings from my ongoing investigation, we can help ensure such corrupt dealings at this premier institute never happen again.”
At the time of his guilty pleas, Smith admitted that he abused his authority as President of Upstate to increase his pay without authorization, using several methods. Specifically, Smith admitted that, with the intent to obtain a benefit, namely, additional unauthorized compensation, in his capacity as President of Upstate, he:
(1) directed his subordinate to approve an unauthorized raise in the amount of approximately $28,450 in 2007, through the State University of New York Research Foundation, for Smith’s benefit. Smith received the proceeds from that raise through the date of his resignation, totaling approximately $189,412 in additional salary he would not have otherwise earned;
(2) submitted, approved, collected, and received unauthorized reimbursements for housing expenses above and beyond his authorized $5,000 per month housing allowance, by submitting receipts and credit card statements for reimbursement of expenses to which he was not entitled, and by orchestrating an increase in his Medical Service Group supplement to cover housing expenses to which he was not entitled; and
(3) directed and oversaw the creation of an unauthorized deferred compensation plan through MedBest Medical Management, Inc. for the benefit of himself and others, without the authorization or knowledge of the SUNY Chancellor.
As part of a plea agreement, Smith is required to pay $247,419.95 in restitution and $3,000 in fines. He already paid $75,000 towards that amount on the date of his plea. He is required to pay the remaining balance over the course of three years of probation. If Smith fails to adhere to the terms and conditions of his probationary sentence, including the payment of his restitution obligations, he could face up to three years in jail.
Assistant Attorneys General Mary Gorman and Bridget Holohan Scally prosecuted this case and were assisted by Senior Analysts Joseph Conniff and Sara Pogorzelski, under the supervision of Public Integrity Deputy Bureau Chief Stacy Aronowitz. The investigation was handled by Investigator David Buske of the Investigations Bureau, with support from Supervising Investigator Richard Doyle and Deputy Bureau Chief Antoine Karam.
The Attorney General thanks Inspector General Leahy Scott and her office for their valuable assistance in this investigation.
In addition to a referral from the Inspector General’s Office, the Attorney General also received a referral from the New York State Joint Commission on Public Ethics (“JCOPE”) to prosecute this matter, and thanks JCOPE for their valuable assistance with this investigation.