Macomb County Probate Judge Sandra Harrison originally jailed Fred Smith on Oct. 17 after she found him in civil contempt and in early November ordered him jailed at least until Nov. 21.
Harrison said at a Nov. 7 review hearing that Smith has failed to provide “an accounting” of millions of dollars despite four or five orders over more than two years to do so. Harrison has implored him to follow the orders many times.
“Mr. Smith, you’re ordered to file these accounts,” Harrison reminded him. “These are not complicated orders. They’ve been in place for two years. You haven’t done anything to account for millions of dollars.”
Smith was trustee of the trust fund for about 10 years from 2005 to 2015, attorneys said.
Harrison at a prior hearing told Smith he was “co-mingling everything and buying whatever you wanted to buy and keeping no record of it.”
“I’m not effective in a jail cell, your honor,” Smith said. “I’m limited to a short stubby pencil and limited amount of paper. ... It’s been difficult to operate at all without resources.”
He called the attempted inquiry a “witch hunt.”
“There is nothing there,” he said. “I’m not hiding anything.”
He said he has been stymied in his efforts to provide an accounting as he hired an attorney who failed to provide a quality report, and a Romeo accountant also has worked on getting the information but wrote to Harrison she doesn’t have access to all of the bank accounts.
Harrison said Smith has had plenty of chances to follow the multiple orders. In October 2018, she fined him $200 per day to follow the orders and at one point increased it by another $100. The total amount of fines is about $110,000; Smith has not paid the fines.
“What else would you have me do? What else do we have to do to get your in line?" Harrison said. "You’re going to remain incarcerated until you make real progress to get these accounts filed.
“You gotta get it done. No matter how you go about it or accomplish it, get it done.”
She said Smith can work with his associate, Marty Prehn of Eastpointe, and jail officials in exchanging and filing paperwork.
Smith has failed to follow up on the judge's offer to sign subpoenas for him to secure information from financial institutions, she said. She said Smith needs to provide copies of items such as bank statements, cancelled checks, receipts and invoices.
Prehn, a self-described elder advocate, said Macomb Probate Court does not have jurisdiction over the case because the trust fund was created in Florida. Smith’s mother’s husband died in the 1990s when they resided there.
Smith has not formally made that argument in court but on Oct. 17 as he was being taken from the courtroom to go to jail, remarked the court didn’t have jurisdiction.
At an elder-abuse listening-tour event held by Attorney General Dana Nessel in July in Clinton Township, Smith complained about his mother's case.
Prehn also argued to The Macomb Daily “the whole purpose of a trust” is to protect funds from Probate Court interference.
At the Oct. 17 hearing, Smith said his mother, Shelby Smith-Steves, 92, is being isolated from him. Moments before Thursday’s hearing started, Smith greeted his mother in her wheelchair, and she told him she loves him.
Prehn said he believes Smith has grounds for a lawsuit against the county. Prehn said he has complained to the FBI and state Attorney General’s Office about attorney George Heitmanis, the guardian and conservator for Smith-Steves for his actions in this case.
Heitmanis not only staunchly supports Harrison’s efforts to force an accounting of a roughly estimated nearly $5 million in alleged unaccounted funds but gained an order from Harrison to refer the matter to Nessel's office for a potential criminal investigation into Smith and his actions.
Heitmanis told The Macomb Daily he disputes the claim that Macomb Probate Court, a state court, does not have jurisdiction. He said a Michigan court has jurisdiction if any alleged misspending occurred here.
“The question is, what happened to the money?” Heitmanis said. “Who is the end receiver of the money?”
He said at the Oct. 17 hearing, “$5 million can’t just disappear and nobody account for it. That’s something the state recognized has to be resolved.”
He said the Attorney General’s office expressed interest in the case.
As the trustee of the trust, Smith “had a duty to account. He was acting on behalf of his mother for her benefit,” Heitmanis said.
Attorney Eugene Hamlin, substituting for Heitmanis at the Nov. 7 hearing, said regarding Smith’s incarceration: “Our position is if he doesn’t comply with the orders, he should sit in jail.”
Harrison also ordered Smith to bring a classic car that he purchased to Heitmanis’ office so it can be inspected and photographed. She had ordered that previously.
In addition, she ordered that Prehn remove photos of Smith-Steves at the nursing home where she is residing from his Facebook page and has been barred from visiting her. Prehn took the photos during a visit by him and Fred Smith in September.
Harrison scheduled another review hearing for Nov. 21.
Smith-Steves also has a court-appointed attorney, George Drosis, who supports the judge’s effort to seek an accounting.
Smith also filed a motion for release from jail based on his comfort dog, “Schubert,” being in poor health. He said the dog needs him. Smith said he served in the military during the Vietnam War and suffers from post traumatic stress disorder.
But Harrison denied it, expressing sympathy for the dog’s illness but saying that it was not a sufficient reason for release.
Smith-Steves has been residing in a Romeo nursing home for several months but told the judge Oct. 17 she wants to move back into her Romeo area home, which must be renovated to further accommodate her. Her other son currently resides there with his wife, and they would take care of her during off hours when care-taking staff wasn’t working, under a plan revealed at the Oct. 17 hearing.
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Man jailed by Macomb judge for failing to disclose trust-fund spending, denies wrongdoing