Facebook and Nike diversity manager gets prison for fraud

A former diversity manager at Facebook and Nike was sentenced to five years and three months in prison for stealing more than $5 million from those companies that had been earmarked for DEI initiatives, federal prosecutors said.

Georgia resident Barbara Furlow-Smiles, who pleaded guilty to wire fraud in the case in December, stole more than $4.9 million from Facebook “utilizing a scheme involving fraudulent vendors, fake invoices, and cash kickbacks,” Atlanta U.S. Attorney Ryan Buchanan said in a statement.

“After being terminated from Facebook, she brazenly continued the fraud as a DEI leader at Nike, where she stole another six-figure sum from their diversity program,” Buchanan said.

Furlow-Smiles, 38, used the money she stole “to fund a luxury lifestyle in California, Georgia and Oregon,” according to Buchanan’s office, which had asked a judge to sentence her to 6½ years.

She was a lead strategist and global head of employee resource groups and diversity engagement at Facebook, the subsidiary of Meta. She was not Facebook’s top DEI executive.

Prosecutors said that while at Facebook she linked PayPal, Venmo and Cash App accounts to her Facebook credit cards and then used those accounts to pay her friends, relatives, and others for purported goods and services for the company that were never delivered.

“The vast majority of the money” that went to those other people was kicked back to Furlow-Smiles, prosecutors said.

Prosecutors in a sentencing memo said that Meta determined that Furlow-Smiles began the scheme within months of joining the company in 2017, and that an investigation found she had “manipulated individuals who were close to, and trusted her, including former interns,” who considered her a mentor.

After she was fired from Facebook in mid-2021, Furlow-Smiles worked for Nike from November of that year to February 2023 as senior director of diversity, equity & inclusion.

While there, she executed a theft scheme similar to the one she did at Facebook, prosecutors said.

Furlow-Smiles, who lives in Marietta, was sentenced Monday in Atlanta federal court. District Judge Steven Grimberg also ordered her to pay restitution of $4.98 million to Facebook, and another $121,000 to Nike.

Meta previously told CNBC that the company cooperated with law enforcement in the investigation of Furlow-Smiles, who must report to prison by July 22.

Prosecutors in their sentencing memo said that in addition to the money Furlow-Smiles stole from the company, Meta lost more than $4.5 million “in addition to other expenses, such as attorney’s fees, which were incurred as a result of Meta having to uncover and investigate her fraud scheme.”

“As Meta notes, ‘the harm from [Furlow-Smiles’] criminal conduct cannot be measured purely in financial terms,'” prosecutors recounted in their memo. “Her ‘crimes also resulted in anguish amongst those employees that worked closely with her.'”

Nike told prosecutors that she was “entrusted as a leader for [the] company, that she would embody the value of ‘Doing the Right Thing’ which is one of NIKE’s key maxims,” the prosecutor said in their memo. “As Nike explains, ‘[t]o say that Ms. Furlow-Smiles violated our trust would be an understatement. The fraud committed by Ms. Furlow-Smiles violated the trust of and devastated the employees who managed and worked with her.’ “

Nike also told prosecutors her “complete lack of accountability or remorse was incredibly disappointing,” according to the memo.

CNBC has requested comment from lawyers for Furlow-Smiles, and from spokespeople from Meta and Nike on her sentencing.