Tribal group sues NFL legend over multimillion-dollar fraud scheme

Emmitt Smith is accused of misusing a $2.5 million loan given by a Cherokee-led economic development agency to settle a prior debt with a third party.(CN) — A Native American economic development agency sued former Dallas Cowboys star Emmitt Smith and several business partners Monday in Delaware chancery court, claiming the NFL’s all-time leading rusher defrauded the group out of $2.5 million.Co-founded by Smith and businessman David Mosley, real estate and energy company 4 13 Solutions purportedly approached Kituwah LLC — a business group owned by the Eastern Band of Cherokee Indians — in early 2023 with a potential investment opportunity.According to Kituwah, Smith and Mosley suggested the two organizations form a joint venture to invest in a planned solar farm in Texas called “Project Exodus,” claiming Kituwah would need to provide a $2.5 million investment to fund the venture.Kituwah says 4 13 Solutions promised mutual ownership and control of the joint venture, acquisition of an Energy Department loan for permanent financing and millions in income from the solar farm by the end of 2024. The investors claim Smith and Mosley insisted they would repay Kituwah within months, so it agreed to form joint LLC Jabez 4 10 and provide the $2.5 million loan in September 2023.The problem? None of 4 13 Solutions’ promises came to fruition, according to Kituwah.Instead of sharing control of the venture, Kituwah claims 4 13 Solutions shut the Cherokee group out of managing it entirely; to this day, it says it has no visibility of the joint company’s finances.No federal loan or alternate private loan was ever acquired, according to the Native agency, and 4 13 Solutions hasn’t provided any evidence of “any meaningful progress toward completion” of the solar farm.Instead of promptly repaying Kituwah for its $2.5 million loan, the legendary running back’s company is accused of funneling those funds to a minority owner of the joint venture who was supposedly owed funds from a previous investment — “essentially, like a Ponzi scheme.”As months passed, Kituwah repeatedly requested its loan be repaid by 4 13 Solutions — and after each request, Kituwah said, Smith and Mosley would “come up with a different excuse” until eventually cutting all contact with Kituwah entirely.“Despite being present on multiple calls where Kituwah asked repeated questions about the [loan and joint venture agreement], neither the principals of 4 13 Solutions nor Wilson Holdings disclosed how the loan proceeds … had really been used,” Kituwah wrote in its complaint. “Their lack of disclosure is telling and only further confirms 4 13 Solution’s fraudulent intent and the wrongful nature of the payment.”Kituwah seeks at least $2.5 million in damages, plus interest.Representatives for 4 13 Solutions could not be reached for comment.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads