Dallas Cowboys legend Emmitt Smith accused of defrauding company out of $2.5 million
Former Dallas Cowboy great Emmitt Smith is facing a lawsuit in a Delaware court, accusing him of defrauding a Native American tribally-owned company over a solar farm project in Texas.
The lawsuit, obtained by CBS News Texas, claims Smith worked with two other men – identified as David Mosley and Darrel Wilson – to obtain a $2.5 million loan from Kituwah, LLC, under the pretense of obtaining an interest in the project. Kituwah is an agency that invests in business opportunities for the Eastern Band of Cherokee Indians. It is headquartered in Cherokee, North Carolina, located about 170 miles northwest of Charlotte.
What does Kituwah claim?
The suit claims Smith and Mosley obtained the money in 2023 by forming a joint venture between Kituwah and their own company, 4 13 Solutions, for the loan. Smith and Mosley allegedly further promised to transfer the interest in the solar farm project back to the joint venture and ultimately repay Kituwah's money.
Instead, Kituwah claims Smith and Mosley used the funds to improperly pay Wilson Holdings, a company owned by Wilson. Wilson's company had partnered with them before and, according to the suit, the payout was compensation for prior unsuccessful loans and investments that it made with 4 13 Holdings. All the while, the suit claims Smith and Mosley told Kituwah they were using Kituwah's loan properly.
Further, the suit claims Smith and Mosley pressured Kituwah into granting the loan by inventing false offers from other investors and claiming that the company they were seeking to invest in was ready to walk away.
Kituwah's lawsuit further claims that those false offers led it to form a new limited liability company, incorporated in Delaware, called Jabez 4 10. The company was formed together with 4 13 Solutions and Wilson Holdings. The loan's funds were directed to Jabez.
However, Kituwah claims 4 13 Solutions had sole access to and total control over Jabez's accounts through Smith and Mosely, and that the pair took the proceeds, claiming the money would be used to convey the ownership interests in the solar farm project. Instead, Kituwah claims 4 13 Solutions stopped participating in Jabez and abandoned promised efforts to obtain a loan from the Department of Energy to provide permanent financing.
The promised solar farm, however, never materialized by the end of 2024, according to the suit. 4 13 Solutions also allegedly had not made any progress in acquiring the rights for the project.
Has any money been repaid?
Kituwah's suit claims the loan was due on Feb. 1, 2024, and that notices were sent to Jabez and 4 13 Solutions. A response was allegedly never provided; Kituwah claims its repayment demands were simply ignored. This prompted Kituwah to investigate, which found that "4 13 Solutions' representations were part of Smith's and Mosley's scheme to cheat Kituwah out of $2.5 million," likening it to a Ponzi scheme.
Kituwah's suit further claims that a letter from Darrel Wilson admitted that Jabez had promised to pay his company $2.5 million once the solar farm project secured "permanent financing." However, the company claims Wilson also admitted in that letter that the repayment condition never happened. Kituwah also alleges that Wilson admitted he didn't know what triggered the payment.
What does Kituwah want?
Kituwah's suit says it wants to take the case to trial. The company wants the $2.5 million back, plus interest, costs, and expenses, along with anything else determined at the trial. It also wants Smith, Mosley, and Wilson to pay its attorney's fees, costs, and expenses incurred in the investigation and in bringing the issue to court, along with any other relief the court deems proper.
CBS News Texas is working to reach out to Smith for comment.