Former SUNY Med School President Illegally Boosted Pay

SYRACUSE, NY — The president of SUNY Upstate Medical University figured out several ways to boost his pay without letting the chancellors of the state university system know. Now he must pay more than $250,000 in restitution and fines.

The quarter-million is part of a plea deal that will keep David R. Smith out of jail. He is expected to be sentenced to three years probation, Attorney General Barbara D. Underwood announced Monday. Smith entered a guilty plea before the Honorable Vanessa E. Bogan in Syracuse City Court, to three counts of Official Misconduct in violation of Penal Law § 195.00(1).

“David Smith brazenly abused his position and exploited those he served in order to line his own pockets – and now he’s facing the consequences,” Underwood said in the announcement. “We have zero tolerance for those who try to game the system and violate the public trust, and my office will continue to hold public officials to account.”

From September 2006 to November 2013 (when he resigned) Smith was the President of SUNY Upstate Medical University in Syracuse. His pay was roughly $360,000 a year.

Upstate is an upper-division/transfer and graduate school consisting of four colleges with educational programs that train healthcare, medical and biomedical research professionals. These colleges include the College of Medicine, the College of Nursing, the College of Health Professions and the College of Graduate Studies. They house both undergraduate and graduate degree programs.

“Once a top executive at a premier medical school and now a convicted criminal, this defendant shamelessly corrupted his position of trust and exploited the university’s lax oversight for an extraordinary theft," said Inspector General Catherine Leahy Scott. "Dr. Smith improperly manipulated and siphoned from numerous funding streams under his control, and my investigation is continuing to help ensure such foul play can never happen again. It is now clear that his primary role of ensuring the highest quality education for students and care for patients was at best secondary to his cynical schemes to illicitly pad his income."

Smith’s initial compensation was negotiated by the then-SUNY Chancellor, followed by approval of the SUNY Board of Trustees. Smith knew he was required to obtain approval from the SUNY Chancellor before receiving any raises or other increases in his compensation, prosecutors pointed out.

Smith bumped up his take-home with three main methods:

• He got a subordinate to approve $28,450 a year through through the State University of New York Research Foundation. Smith received the proceeds from that raise through the date of his resignation, totaling $189,412 in additional salary he would not have otherwise earned.
• He submitted, approved, collected, and received 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.
• He 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.

In addition to pleading guilty, Smith is required to pay $247,419.95 in restitution and $3,000 in fines. Smith is also expected to be sentenced to three years of probation on Dec. 10.

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.

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