by Christina Hall
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| Lawyer arraigned on embezzlement charges from trust of late Carhartt heiress. |
Less than two weeks after the death of beloved metro Detroit businesswoman and philanthropist Gretchen Carhartt Valade, a Grosse Pointe Farms lawyer who oversaw her trust is facing numerous charges that he stole millions of dollars from it.
David Sutherland, 57, is charged with two counts each of embezzlement of $100,000, one count of embezzlement from a vulnerable adult of $100,000 or more and one count of conducting criminal enterprises. While specific amounts were not provided in the criminal complaint, earlier civil filings cited millions of dollars missing, and the judge Wednesday called the figures "staggering."
He was arraigned Wednesday in Grosse Pointe Farms Municipal Court, with Valade's son — the current chairman and CEO of Carhartt, the well-known company Valade's grandfather founded — sitting just feet away.
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| Attorney James Joseph Sullivan, left, speaks with his client David Sutherland. |
Embezzlement occurred during 2019 and 2020, according to the criminal enterprise count. The criminal complaint also lists dates from Jan. 1, 2017, through Dec. 31, 2022.
It states that Sutherland, “using the resources of his law practice, exploited his position of authority to embezzle from a client’s irrevocable trust, serving simultaneously as lender, borrower, attorney and trustee over the money he took from his client’s account.”
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| David Sutherland, an attorney who has been charged with embezzling. |
Grosse Pointe Farms Municipal Court Judge Charles Berschback, in setting a $250,000 cash or surety bond, said “the amount that is being alleged is staggering.”
The Michigan Attorney General's Office alleges that Sutherland used his position as the personal attorney and trustee to embezzle millions of dollars from Valade's irrevocable trust by issuing himself a series of loans without her permission.
“Mr. Sutherland abused his authority as an attorney and trusted adviser to steal millions from a longtime client and must be held accountable,” Attorney General Dana Nessel said in a release. “Our elderly populations are particularly susceptible to financial exploitations, and my Financial Crimes Division is prepared to hold these bad actors accountable for such egregious and illegal violations of their client’s trust.”
Berschback ordered Sutherland to wear a GPS tether and turn in his passport. He said “additional safeguards” are needed because of the seriousness of the charges.
Sutherland’s next court date is Jan. 25.
His attorney, James Joseph Sullivan, who entered a not guilty plea for his client, told Berschback that he didn’t know if Sutherland could pay the bond, adding “that’s a lot of money … I don’t know if he can really post that, judge.”
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| Municipal Judge Charles Berschback, left, listens as attorney James Joseph Sullivan, right, defends his client David Sutherland. |
He said Sutherland is a resident of the area, has no criminal history and would be present. Sullivan requested a personal bond and no tether.
Sullivan said "this is not something new" even though it "may be new to the media." He said "some of this is somewhat grandstanding."
He said this is "a small fraction of the whole story. I think once the whole story is told, when people hear it, it's going to be a much different climate and attitude toward this, and for him, my client, than there is right now."
Carhartt CEO, Valade's son attends arraignment
Assistant Attorney General Dan Gunderson said he was unable to comment after the arraignment, for which Sutherland appeared in court and was escorted from the courtroom afterward by law enforcement.
Each count is a 20-year felony offense.
Valade died Dec. 30 at the age of 97 at her Grosse Pointe Farms home. The metro Detroit businesswoman and arts patron was the granddaughter of Carhartt Inc. founder Hamilton Carhartt. She served as chairman emeritus for the workwear company, which is still family-owned.
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| Mark Valade listening during an arraignment hearing for David Sutherland |
Her son, Mark, who is chairman and CEO of the company, attended Sutherland's arraignment.
“The Valade family appreciates the diligent efforts of the Attorney General’s Office in investigating David Sutherland’s conduct and the filing of these criminal charges,” Valade family spokesman Ron Fournier said in a statement.
“They are confident in the legal process and optimistic that justice will prevail and that no other members of our community will become victims of Mr. Sutherland.”
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| Gretchen Valade |
In late 2022, Wayne State University’s iconic Hilberry Theatre building was shut down to be transformed into the Gretchen C. Valade Jazz Center, a world-class performance hall. Valade made gifts to jazz studies and performance at Wayne State totaling $9.5 million.
Allegations in prior court records, too
In 2021, a complaint was filed against Sutherland; his law offices; Tuscola Energy Inc.; BP Pizzas LLC; DTS Pizza Napoli LLC, 601 Piquette Holdings LLC, and Palms Land Co. LLC in Oakland County Circuit Court by the Gretchen C. Valade Irrevocable Living Trust, which was created in 2009. It stated Sutherland was a member, partner or chairman in relation to the other listed defendants.
According to that complaint, Sutherland spent years as the trusted adviser and trustee for the trust, and after establishing himself in this position he “embarked on a campaign of diverting Trust assets to his own use, treating the Trust as his own personal piggy bank.”
That complaint alleged Sutherland lent himself more than $7.7 million and he lent a business of which he was 50% owner more than $7.6 million. It also stated that he repeatedly wrote checks to his own businesses from trust accounts even though the trust had no involvement with those businesses.
“Compounding those actions, Sutherland caused the Trust to borrow money at market interest rates in order to lend it to him and his affiliates at below-market interest rates," according to that complaint, which states Sutherland served as trustee until being removed in August 2020. "Now, Sutherland is unable or unwilling to repay the moneys he has borrowed, and the Trust has been otherwise damaged by his behavior."
The venue of that case was changed to Wayne County, where it is currently being handled in probate court.
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Lawyer charged with 'staggering' theft from trust of late Carhartt leader
1 comment:
This kind of theft should be in criminal court, not probate court. Lock him up and throw away the key.
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