Smith first met comedian John Belushi on the set of Saturday Night Live in 1976 when The Band were the musical guests.
She later met Belushi again through Wood and Richards and was contacted by Belushi to purchase the drugs that eventually killed him. Smith alleges that she injected Belushi with 83 speedballs (a combination of cocaine and heroin) at the Chateau Marmont in Hollywood, California in 1982, and that this injection led to his death. According to Woodward, Robin Williams was on the scene at the time, and was "creeped out" by Smith, whom he thought to be a "lowlife". Belushi had been battling cocaine addiction for years. He was not a heroin addict, though he had used the drug infrequently before his death.
Released after initial questioning on the morning of Belushi's death, Smith spoke briefly to freelance writer Chris Van Ness. Then, two National Enquirer reporters, Tony Brenna and Larry Haley, spoke with her and published their lengthy in-person interviews with her under the headline: "I killed John Belushi. I didn't mean to, but I am responsible." This led to the charge against Smith in Belushi's murder and 13 counts of administering cocaine and heroin. The National Enquirer reporters refused to testify at the subsequent trial and were threatened with incarceration by Judge Brian Crahan; however, he later vacated the contempt order.
Smith eventually returned to the United States, in June 1986 where she accepted a plea bargain by "plead[ing] guilty to involuntary manslaughter and several drug charges". She served 15 months in prison at California Institution for Women between December 1986 and March 1988. She was deported to Canada after release and moved to Toronto "where she worked as a legal secretary and spoke to teenagers about the dangers of drugs".