How a top Nike and Facebook DEI executive secretly stole millions – "facebook" – Google News

It was a cool, mostly cloudy Thursday in late October when two men in suits turned up outside the Portland home of Barbara Furlow-Smiles, a DEI executive between jobs. According to a sentencing memo that would be filed by her lawyers months later, Furlow-Smiles knew she was in trouble because, let’s face it, “no one wears suits in Oregon.”  

Eight months earlier, Furlow-Smiles had been laid off from Nike, where she’d been the senior director of diversity, equity, and inclusion for more than a year. This role followed a nearly five-year stint in a similar job at Facebook (now Meta) in San Francisco. That fall day, she had just returned to Portland from a job interview with Pixar in Emeryville, California, and was at home with her daughter, who is nine.

Furlow-Smiles was right to be worried about the well-dressed men in a city known for fleece. They were FBI agents who’d been investigating the former executive, 38, for stealing funds from her employers in a crime spree that began shortly after she joined Meta and continued for six years at two Fortune 100 companies

Two months later, Furlow-Smiles pleaded guilty to wire fraud in an Atlanta federal court and admitted to siphoning $4.9 million from Facebook and more than $100,000 from the sports apparel maker through an elaborate scheme involving fake vendors and bogus expense reports. Her crime shocked the DEI community, already under fire from conservative groups who claim that corporate spending on diversity is wasteful and an affront to shareholder rights. Not only had Furlow-Smiles stained a mission-driven, justice-focused profession and pocketed millions earmarked for programs meant to uplift underrepresented people, but she did so at the worst possible cultural moment. 

A judge sentenced Furlow-Smiles to a five-year prison sentence in May and ordered her to return the stolen funds. (It’s unclear whether she has the money or enough assets to sell to do so.) In a pre-hearing letter to the judge, she said she takes full responsibility for the crimes and couldn’t explain how she “squandered” a dream career. But she also attributed her mistakes to an entrenched people-pleasing problem and a “savior complex” that caused her to lie to friends and family about having the means to support them financially. The complex, she added, was a coping mechanism she developed after surviving physical and sexual trauma as a child and teenager. “I am pleading for your mercy not as a dismissal of my actions but as an appeal to your understanding of human imperfection,” Furlow-Smiles wrote.  

Friends who have known Furlow-Smiles for years confirmed for Fortune that, from a young age, she strongly desired to give back to her community and the “village” that raised her, as her lawyers explained in their memo for the judge. “I see her as a Robin Hood,” said one friend, who requested anonymity because of the online backlash that Furlow-Smiles faced when news of her guilty plea went public last December. To this friend’s knowledge, her now-convicted chum used some of the stolen money to help friends and family in need. This acquaintance, who worked with Furlow-Smiles at an early job at Cox Communications and later at Facebook, also rejected the notion that Furlow-Smiles was motivated by greed. “She was well liked, well known. She made things happen,” she said, and people turned to her for support. When she heard the specifics about Furlow-Smiles’s crime, says the friend, “I thought, that’s Barbara trying to help too many people.”

At her sentencing hearing, Furlow-Smiles’s defense attorney, Lance Clarke, also depicted Furlow-Smiles as a woman who felt obligated to support friends and family who came to her with requests for aid. At the same time, the defense team wrote in their letter to the judge, Furlow-Smiles was a striver who got caught up in the “move fast and break things” culture at Facebook and made bad decisions under pressure. Accounts of Furlow-Smile’s experiences and onboarding at Facebook that Clarke shared in the memo further suggest the actions Furlow-Smiles took to enrich herself were not entirely unusual at her former employer. 

Indeed, several of Furlow-Smiles’s friends and former colleagues similarly argued that while the ex-DEI head is rightfully being held accountable for her crimes, her sentence is too harsh for behavior they see as rampant at large tech firms and elsewhere. And as such, she shouldn’t be the only person facing penalties. (Meta declined to comment on its history with Furlow-Smiles and instead directed Fortune to a Department of Justice press release about the case. Nike did not respond to a request for comment.) 

Juliet Jacob, a formerly licensed therapist who has recently come to know Furlow-Smiles through a support group for women impacted by the justice system, told Fortune that she believes Furlow-Smiles is a high performer who developed ambition addiction. Our work culture is about “performance at any cost,” which can lead to an addiction for some and drive self-sabotaging and other wrongful behaviors., she said. But Jacob also thinks Furlow-Smiles was “low-hanging fruit” for federal prosecutors. “Women and people of color are often picked up for problems because they’re the easiest to reach,” said Jacob, who was formerly incarcerated for Medicaid fraud. 

Still, Furlow-Smiles understood the severity of her crimes before and after she was caught. In court, her lawyer told the judge that when the FBI agents first identified themselves, she almost fell into one officer’s arms, crying “not because she was afraid [but] because it was a sigh of relief, it was a weight that was lifted off her shoulders.” Finally, she was forced to stop.

Dream job, big budget

Growing up, Furlow-Smiles was one of the few Black people in the mostly white town of Katy, Texas. Census data from 1990 shows that only 5% of the town’s 8,000 residents identified as Black. In high school, when Furlow-Smiles asked for permission to create a Minority Heritage Club for non-white students like her, her principal initially declined, reportedly saying that if he approved it, he might one day be forced to say yes to a KKK club, according to a character reference letter submitted by one of Furlow-Smiles’s childhood friends. Furlow-Smiles persevered, eventually convincing the school superintendent of her support group’s necessity. It was her first win as a champion for inclusion.

She moved to Atlanta to complete a degree in political science at the prestigious historically Black Spelman College and completed a master’s in public administration at Baruch College. She landed her first job in diversity and inclusion at MTV’s New York City headquarters, where she met the man who became her husband, and later moved to Atlanta to work at Cox Communications. When Facebook recruited Furlow-Smiles in 2017, the company asked her to move to San Francisco. She became the global head of employee resource groups and diversity engagement, responsible for planning events around Black History Month, Pride, and other cultural and identity-related holidays. “She had been training her whole life for an opportunity like this,” her lawyers wrote in the letter to the court. “She firmly believed she could and would deliver for her community and make Facebook a better, more inclusive, diverse, and supportive space.”

Furlow-Smiles excelled at her job, attracting a top-level “redefine” ranking in Facebook’s notoriously tough performance reviews, according to her defense team’s statement. (Facebook said it could not confirm this as it does not share employee information.) “At Facebook, Barbara was a rock star. She put together a lot of programs that were seen worldwide,” said the friend who worked with her at Cox and followed her to Facebook, taking on a DEI role in an adjacent department. Furlow-Smiles won kudos for a virtual Juneteenth celebration in 2021, for which Facebook gave her a $10 million production budget. Her goal was to land a “big get” speaker, the sentencing memo said, and she delivered by booking Tina Knowles-Lawson, aka Beyoncé’s mother, as a guest speaker, among other notable Black figures. 

Privately, Furlow-Smiles was struggling with anxiety and burnout. Soon after arriving at Facebook in 2017, she began experiencing new levels of pressure and exhaustion. The defense team claimed a litany of other factors contributed to her mindset at the time, including the high cost of living in San Francisco, the expectation that she maintain a standard of living that suited her role, and the ill health of her husband, Ernst. He had developed a rare autoimmune disease that would require extra medical expenses, and he was the primary caregiver for the couple’s daughter.  

Furlow-Smiles responded to these stressors by enacting various illegal schemes. According to the Department of Justice, she submitted invoices to Facebook from friends and family whom she passed off as vendors and then had those associates funnel most of their payments back to her. She also falsified expense reports and set up a system where actual vendors sent her kickbacks. The prosecution found that 39 people, who have not been publicly identified, were part of the fraud ring. They include babysitters, former interns, hair stylists, and Furlow-Smiles’s university tutor. It’s unclear how many understood the scam and their role in it. The prosecutor’s investigation is ongoing.

The FBI also determined that Furlow-Smiles linked her personal PayPal, Venmo, and Cash App accounts to her work credit cards and spent lavishly on herself and her family. She directed $18,000 to pay for her daughter’s preschool and spent $10,000 on “specialty portraits.”  Her kickbacks were delivered as cash, sometimes in person, or by mail or FedEx, and often camouflaged by decoy items, like t-shirts. 

How the kickbacks began

The reasoning that Furlow-Smiles used to justify these crimes is contradictory at times. Her defense argued that Furlow-Smiles discovered a new world when she began working at Facebook, where controls were lax, and corporate leaders regularly pitched and produced multimillion-dollar projects with little oversight. 

While Furlow-Smiles was onboarding at Facebook, a colleague who formerly ran employee resource groups there told the new hire that Facebook’s culture was anti-corporate and that she didn’t need to be as strict about rules and expense limits as she had been at her previous job, according to the defense team’s sentencing memo. “Why are you coming in with all these rules? As long as you’re doing what you need to do and perform, you’re good,” the colleague allegedly told Furlow-Smiles after she attempted to set up new expense guidelines for ERG members. That onboarding manager also suggested that Furlow-Smith have Facebook foot the bill for whatever was necessary to support her needs, especially as she juggled parenting and travel. “If your baby needs something, you get it, and you expense it,” this person allegedly said, the filing states. Furlow-Smiles was even led to believe it was acceptable to have Facebook pay for the cost of bringing her husband, daughter, and a babysitter on a work trip overseas. Facebook flagged the expense, according to the court memo, but Furlow-Smiles’s manager approved it when she explained her family’s situation and her husband’s illness.

And yet, even though Facebook apparently approved of these steep expenses, Furlow-Smiles felt she wasn’t paid enough to live a lifestyle that would “put her in the same rooms” as people like Beyoncé’s mother and enjoy a high quality of life, her lawyers wrote. Facebook declined to give her a requested raise; the timing of her request is unclear. Court documents do not disclose Furlow-Smiles’s salary, but Glassdoor statistics suggest managers at Meta earn $227,000- $351,000.

“She took her requests and justifications to her superiors and asked, ‘What do I have to do to get paid more here?’” her lawyers wrote. “Barbara was emotionally on the verge of having a nervous breakdown. She was reaching her breaking point from the pace, the pressure to deliver, and the constant need to innovate and one-up her own accomplishments. Unfortunately, Barbara’s raise never came, despite consistently outperforming her peers.” 

Furlow-Smiles pocketed the money she felt she deserved, justifying her transgressions by reminding herself that she gave Facebook her all. 

Just after starting at Facebook, Furlow-Smiles also discovered that her coworkers were friendly with vendors who supplied items like swag for company events or photography and other services. Several of her coworkers allegedly relied on vendors to provide kickbacks, according to the sentencing letter. “It was the norm,” her lawyers wrote. 

At one point early in Furlow-Smiles’s tenure at the social media giant, a vendor pulled her aside and propositioned her, per the sentencing document. The vendor explained that they went to school with one of Furlow-Smiles’s colleagues and had set up a kickback arrangement with that person. Would she like to set up a similar deal? Furlow-Smiles turned down that offer but took note of the opportunity to earn extra money. Then, she learned from members of Facebook’s recruiting team that they often received invoices for millions of dollars that they paid dutifully, even though they didn’t know what product or service the vendor had provided. According to her recollection, and as stated in the sentencing memo, the invoices often didn’t even include contact information. 

Furlow-Smiles came to understand that what mattered most was getting the job done at whatever cost. When she was later propositioned again, “it became easier to say ‘yes’ to these things,” she told her lawyer.

Andi McNeal, chief training officer at the Association of Certified Fraud Examiners, says these types of rationalizations—claiming that everyone is doing it or feeling entitled to taking money one believes is owed them—are exceedingly common in cases of white-collar crimes. People frequently find themselves in a perfect “fraud triangle” storm. They feel financial pressure, have an opportunity to commit fraud, and are able to rationalize it. 

“Most fraud perpetrators see themselves as good, law-abiding citizens,” McNeal said. Though one can’t blame company culture for a personal choice or use it as a legal defense, a workplace riddled with ethical breaches, and Facebook has weathered several such crises, can set a tone that makes it easier for people to find the emotional excuse they need to do the wrong thing. 

Furlow-Smiles’s lawyers allege this was true at Facebook, writing, “Normal employee behavior at Facebook was relative, and, from the top down, money stealing and scandals were woven into the Facebook fabric.” They claim this culture ensnared leadership, pointing to the controversy surrounding former Meta COO Sheryl Sandberg, whom the company investigated for using corporate resources to plan her wedding. (The status of the investigation has not been publicized and Meta did not immediately respond to a request for comment.)

Again, this is the part that goads Furlow-Smiles’s former colleagues about their friend’s case: It feels cosmically unfair. A professional friend and fellow DEI leader who once worked with Furlow-Smiles and asked for anonymity says that, in his experience at large firms, fudging expenses and receiving payback for setting associates up with vendor contracts is a common practice by executives. “I’ve seen it in plenty of places, across industries, including in tech,” this person said. “I’ve seen leaders paying their country club for whatever, and it’s disguised as a charitable donation.”

White executives commit wrongdoing and walk away with a multimillion-dollar package, he noted. But the rules are different for people of color. “They can do whatever they want to do, but if you’re Black, you keep your nose clean.” 

In Furlow-Smiles’s case, he charged that people above her must have known what was happening or been involved. “There are several chains of approval that those things need to go through,” he said. “The reality is [DEI] is not a revenue-generating space, so every dollar has to be accounted for.”

For a Black woman to be invited into a boys club in tech where everyone is blurring the lines and making unethical choices creates another tricky dynamic, he added, because a woman like Furlow-Smiles might fear being fired for speaking up and doing the right thing. “These crimes are not 100% on her,” he said. 

During the sentencing hearing, Furlow-Smiles’s attorney referenced some beneficiaries of the fraud scheme who allegedly threatened to report Furlow-Smiles if the money stopped flowing. Clarke, her attorney, did not respond to a request for more information about that claim and court documents that might contain details are sealed.  

“Beyond the pale”

When it came time for her sentencing, Furlow-Smiles’s personal history and the environment she described at Facebook could not offset an essential fact: The size of the fraud was massive. Neama Rahmani, a former federal prosecutor who is now a private practice criminal defense attorney in Los Angeles, says this fraud is “beyond the pale.” No matter what her defense team argues, he said, there is no gray zone here.

The median amount companies lose in fraud cases is $145,000, according to the Association of Certified Fraud Examiners, but the average amount lost is much higher at $1.7 million. That’s because long-running scams have an outsized impact on averages, while most fraudsters are caught long before they can cause millions in damages. Furlow-Smiles’s crime was more than twice as large, and it’s unclear how much of the $5 million Facebook and Nike will be able to recover.

The impact of these crimes also went beyond financial considerations. Furlow-Smiles promised young individuals she knew from her past that participating in her scheme would enhance their career prospects, prosecutors explained in a letter to the judge. Instead, those young people are now viewed as possible accomplices in a massive crime operation, with their professional futures tarnished by Furlow-Smiles’s deceit. 

One such victim is a young man Furlow-Smiles met while serving as his college intern coordinator at Cox Communications. Furlow-Smiles stayed in touch with him after he graduated. Once she was at Meta, she hired the former intern to do personal work for her and to complete “projects for Facebook,” the prosecution wrote in a court filing. She then invited him to work under her as a vendor when she moved to Nike. There, “she continued to promise him guidance, assuring him that he would be able to maintain his connections at Facebook,” the document stated, adding, “She not only stole money that was earmarked for DEI programs, but she also manipulated those who respected and held her in high esteem to fuel her greed.”

At Furlow-Smiles’s sentencing, Assistant U.S. Attorney Stephen McClain noted that the former executive had flown some of her associates and mentees to Los Angeles, where they withdrew $10,000 from several ATMs to make it difficult to trace it to her. “It was very elaborate and she did cover her tracks pretty well,” McClain said. “That resulted in her receiving millions of dollars in cash kickbacks both in person, ATM, and mailing.”

Meta and Nike, in their victim statements, underlined the human cost of Furlow-Smiles’s actions, according to the sentence hearing transcript, stating that colleagues had trusted her and felt “anguish” after they were made aware of her duplicity. 

Sometime before Furlow-Smiles left Facebook, the company became aware of Furlow-Smiles’s ruse (it’s unclear how) and launched an internal investigation of its DEI manager gone rogue. The tech giant downloaded data from her phones and computers to piece together the fraud’s reach before calling law enforcement. “It was hard to figure out who was being paid and what they were being paid for. But [Facebook] did an internal investigation and then presented the results to us,” McClain said during the sentencing hearing. By that time, Furlow-Smiles had already landed a job at Nike, where she began working in the fall of 2021. This was a chance for Furlow-Smiles to start anew, but she began committing what McClain called a “brazen” fraud immediately.

In early 2023, Nike laid off Furlow-Smiles during a restructuring that saw the departure of other DEI professionals. Her former coworker recalls that Furlow-Smiles was among the first to start receiving calls from recruiters that year. “I even had someone reach out to me about her because they knew that we were friends,” the person said. “I connected them.” In the course of those conversations, the DOJ published its press release about Furlow-Smiles pleading guilty to fraud. 

Those job talks ended.

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It was a cool, mostly cloudy Thursday in late October when two men in suits turned up…