Green’s Dictionary of Slang

1. (US police) something of little consequence.

1946

N.Y. Times 15 Dec. SM16: Schmear: case of little consequence; minor complaint.

2. (US Und.) flattery.

1950

Goldin et al. DAUL 185/1: Schmear, n. [...] 2.. Mollifying talk or flattery.

3. (US) a slander, a slur.

1960, 1975

Wentworth & Flexner DAS 447/1: schmear n. A slander; a complaint; an attempt to expose or ruin another’s reputation.