Attorney David Sutherland acquitted on 2 charges, mistrial on 2 others in embezzlement case

After a week of deliberation, a Wayne County Circuit Court jury acquitted attorney David Sutherland of two charges Friday in a case in which he was accused of embezzling from trusts of former Carhartt leader and philanthropist Gretchen Carhartt Valade.

Judge Paul John Cusick declared a mistrial on two other charges filed against Sutherland as the jury was hung after deliberating a lengthy period of time — about 22 hours over five days.

The jury acquitted Sutherland on one count each of embezzlement of $100,000 or more and conducting criminal enterprises. It was hung on another count of embezzlement of $100,000 or more and one count of embezzlement from a vulnerable adult $100,000 or more.

Cusick set a June 18 pretrial date to determine the way forward for the charges on which there was a mistrial. Attorneys for both sides were allotted 10 minutes each to talk with the jurors before they were released.

Sutherland's attorney, James Joseph Sullivan, said the jurors were "very dedicated to their work, I mean really, as evidenced by the five days of deliberation."

He acknowledged the case was complex and gave the jury "a lot of credit" for taking the case seriously. Sullivan said he believes Sutherland feels some relief, saying, "It's a big thing to be facing such a thing. Obviously, they don't take you to Disneyland if it goes the other way. (The) pressure, I'm sure has been tremendous.

"Acquittals are good," Sullivan said. "The (charges) that they couldn't agree on, that's up to the prosecution on how they want to proceed on that. That's their prerogative to continue with it, so we'll see."

In an email to the Free Press after the verdict, Danny Wimmer, press secretary for the Michigan Attorney General's Office, wrote: "We appreciate the jury's service and are currently assessing next steps in consultation with the victims and the Court."

Days of difficult deliberations

The jury of six men and six women indicated Monday it was deadlocked. The jury returned Tuesday, where it indicated it was still deadlocked before lunch. It returned Wednesday, Thursday and Friday to continue deliberations.

Jurors had a note about 3:20 p.m. Friday indicating it could not reach a verdict on two charges and that it was hung. Cusick confirmed with the jury foreman that the jury had a verdict on two charges and had not reached a verdict on two others.

After polling the jury after the verdict was read, Cusick told jurors: "I truly thank you for your time and patience."

On Wednesday, jurors asked whether they had the most current estate plan and were told they had all the exhibits and evidence. Jurors had two questions Tuesday related to Valade's 2009 irrevocable trust and the business/entities that are a part of that trust, of which there are five. The trust was at the heart of the case.

The Attorney General's Office accused Sutherland of embezzling millions from Valade's trusts when he served as trustee of them. Each charge was a 20-year felony offense, according to the office.

The trial began May 15 and wrapped up May 31 after closing arguments. During the trial, about two dozen witnesses testified, including Sutherland, who took the stand.

During closings, Scott Teter, division chief of the financial crimes division for the Attorney General's Office, asserted to jurors: "It's sad that before (Valade) passed away, what she found out was David Sutherland was a liar and a thief and not her friend.

"He didn't want to serve Ms. Carhartt. He wanted to be Ms. Carhartt," Teter told jurors. "He wanted to be the wheeler dealer. He wanted to be the guy. And he used her to do it."

He added: "Ms. Valade deserves justice, even if she's not here to see it."

Defense: Charges were 'a bunch of baloney'

Sullivan asserted to jurors during his closing that no crime was committed and his client had authority as trustee and kept a complete, accurate record.

"This notion that he was trying to rip her off is just a bunch of baloney. He had plenty of opportunities for gain," he said of Sutherland. "He's not a thief. He wasn't disloyal to her. He's not a criminal."

Sullivan asserted that Sutherland was targeted and that Carhartt stock was at the center of the issue. Sullivan questioned how much was allegedly embezzled in 2019 and 2020, adding, "I don't know, because they don't know." He implored the jury to find Sutherland not guilty.

Sutherland was arraigned in January 2023, less than two weeks after Valade died.

Valade, a businesswoman, philanthropist and arts patron, died at her Grosse Pointe Farms home on Dec. 30, 2022. She was 97 and the granddaughter of Carhartt Inc. founder Hamilton Carhartt.

Her son, Mark Valade, the CEO of Carhartt, sat in the courtroom for the trial after he testified. He, like Sutherland and the attorneys in the case, waited in the court hallway each day the jury deliberated.

Teter told jurors during closings that Gretchen Valade was a trusting, caring, generous person who was active into her 90s. He told them that she began to have health issues in 2016, and was in a wheelchair two years later. As her health began to fail, Teter asserted, Sutherland's activities began to pick up.

He said it turned Valade, who "gave and gave and gave to this town and to this community, and it turned her into an ATM. Every time they needed money, they came and hit the buttons and hit the buttons and hit the buttons. And pulled her into stuff that turned this thing into a nightmare because of all of the debt and all of the obligations."

The case focused on Valade's 1982 revocable trust and her 2009 irrevocable trust. Prosecutors alleged Sutherland wrote two promissory notes for $5 million each owed to the 2009 irrevocable trust, one to Sutherland himself; the other to Byzantine Holdings LLC, in which Sutherland was a partner. Testimony indicated the notes were produced and backdated a year and a half after the money was withdrawn.

Valade trust 'deeply underwater'

Julie Cotant, a senior trust officer with Plante Moran Trust, previously testified the notes are owed to Valade's 2009 irrevocable trust, and a review of the records on each note indicates the amounts actually owed appear to be in excess of $7.7 million each.

Cotant testified that the 2009 irrevocable trust of Valade's "is deeply underwater" with liabilities far exceeding its assets. Plante Moran became the trustee of the trust in August 2020, taking over Sutherland's role, she testified. When the firm took it over, the interests it held included real estate (buildings and parking lots), some promissory notes and life insurance policies.

Cotant testified the trust today holds about $9.4 million. However, she testified the trust owes $60 million, adding that money was borrowed from Valade's 1982 revocable trust to keep the 2009 irrevocable trust alive. The borrowing occurred while Valade was alive, Cotant testified.

Bruce Knapp, a licensed certified public accountant and certified fraud examiner who looked at the promissory notes for Sutherland and Byzantine Holding LLC, testified during cross-exam by the prosecution that the 2009 irrevocable trust lost money under Sutherland's control.

The prosecution asked if the total loss calculated to the 2009 irrevocable trust during Sutherland's tenure was $42 million. Knapp testified that he thought it was closer to $37 million.

Prosecutors alleged that Sutherland moved money out of the trust to pay for entities Sutherland owned or was tied to and that the 1982 revocable trust was used to try to create cash flow.

Sullivan told jurors at closings the alleged crime wasn't reported to law enforcement for year and a half and that Sutherland's payment plan was rejected. He said Plante Moran considered the promissory notes as assets of the trust. Cotant testified neither note has been paid in full.

Sullivan told jurors Sutherland was venturing, had assets and that Valade was supportive. He told jurors the racketeering statute his client faced, and for which Sutherland was acquitted, is meant for "mobsters" and "gangbangers," not attorneys practicing for three decades. He told jurors that his client was "never a threat."

During the trial, Sullivan asked for a directed verdict and mistrial, both of which Cusick denied.

Sutherland also is accused of stealing from the trust of a Grosse Pointe Farms school in a case that Cusick said had a jury trial slated for July 29. Cusick indicated that trial, in which Sutherland is charged with one count of embezzlement of $100,000, will be canceled and probably be set for a new date next year. That matter also will be discussed June 18, Cusick said.

The Attorney General’s Office said that allegation involves embezzlement of more than $1.4 million from the William Cardinal Foundation, which is to benefit education at St. Paul on the Lake Catholic School in Grosse Pointe Farms. That alleged crime is said to have occurred between Aug. 1, 2018, and last year, according to statements made during Sutherland's arraignment in June 2023 in Grosse Pointe Farms Municipal Court.

Contact Christina Hall: chall@freepress.com. Follow her on X, formerly Twitter: @challreporter.

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This article originally appeared on Detroit Free Press: Attorney acquitted on 2 of 4 counts of embezzling from Gretchen Valade