A Grosse Pointe Farms lawyer accused of embezzling several million dollars from the trust of late Carhartt leader Gretchen Valade will stand trial in Wayne County Circuit Court, a judge ruled Monday, just before the attorney was also charged with stealing from the trust of a Grosse Pointe Farms school.
David Sutherland, 58, was bound over for trial on four charges after a daylong preliminary exam Monday in Grosse Pointe Farms Municipal Court. The hearing included six prosecution witnesses, including Valade’s former housekeeper-turned-household manager and caretaker, investigators, a woman who worked with Sutherland who was given immunity to testify and a representative of Plante Moran, who now oversees the trust as well as related real estate holdings.
The defense called no witnesses.
How prosecutors say Sutherland stole from Valade
Sutherland is facing two counts of embezzlement over $100,000, one count of embezzlement from a vulnerable adult of $100,000 or more and one count of conducting criminal enterprises. Each count is a 20-year felony offense.
Sutherland was trustee when the trust was created in 2009 to 2020.
Valade, a businesswoman, philanthropist and arts patron, died at her Grosse Pointe Farms home on Dec. 30. She was 97 and the granddaughter of Carhartt Inc. founder Hamilton Carhartt.
Testimony from Mary Lubera, who worked with Sutherland from 2006 to 2020, indicated that Sutherland wrote and signed promissory notes in 2017 and 2018 giving him a $5 million personal line of credit from the trust and creating a separate $5 million line of credit for a business with which he was affiliated. But he backdated the notes, which read as if the loans had been authorized a year earlier than they were written. Investigators said that an additional $2 million-plus was embedded beyond the amount authorized in each promissory note, for a total of $7.7 million for one note and $7.6 million for the other.
Lubera tested that she prepared the documents at Sutherland’s direction.
more:Metro Detroit businesswoman Gretchen Carhartt Valade dies at age 97
more:Detroit businesswoman Gretchen Carhartt Valade leaves behind a symphony of accomplishments
Investigator: Sutherland made Valade ‘a human ATM’
Testimony from Julie Cotant, a senior trust officer at Plante Moran, cited check after check for amounts varying from $10,000 to $300,000 written from the trust to numerous businesses that Sutherland was associated with in 2019 and 2020. They had no association with the trust.
She tested that Sutherland repaid $500,000 to the trust in late 2020, after Plante Moran took over the trust, and the business with which he was affiliated made a similar payment.
Scott Teter, division chief of the financial crimes division for the state Attorney General’s Office, said Sutherland turned Valade and her trust “into a human ATM,” again and again taking money “to the tune of millions of dollars.”
more:New details in case against attorney accused of theft from Gretchen Carhartt Valade’s trust
more:Lawyer charged with ‘staggering’ theft from trust of late Carhartt leader
Teter told Municipal Court Judge Charles Berschback that Sutherland, who met with Valade at least every other week, made no attempt to pay until he was caught.
Sutherland’s attorney, James Joseph Sullivan, said Sutherland “had clear authority to loan money to himself” and was entitled to compensation as the trustee. He asked Berschback to dismiss all four charges, saying that the trust itself isn’t a vulnerable adult and doesn’t meet the elements of the vulnerable adult charge.
“There was no misrepresentation or fraud,” Sullivan said.
But Berschback found sufficient elements to bind Sutherland over on all charges. He said several entities controlled by Sutherland got trust money.
Alleged theft from St. Paul on the Lake Catholic School
After the six hours of testimony, Sutherland was arranged on a separate embezzlement charge filed at the end of May.
Attorneys with the Michigan Attorney General’s Office said that allegation involved the 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 the present, according to statements made during the arrangement.
Berschback entered a not guilty plea for Sutherland in the new charge of embezzlement over $100,000. A probable cause conference is set for July 26 in municipal court.
more:Detroit businesswoman Gretchen Carhartt Valade leaves behind a symphony of accomplishments
Berschback kept the same bond as in the Valade case, including a GPS tether for Sutherland, but approved part of a request from Assistant Attorney General Daniel Gunderson to have another attorney from Sutherland’s office supervise Sutherland in vulnerable adult cases.
Berschback said he wanted to know at the next hearing how many cases might be in play after Gunderson mentioned this was a pattern of conduct for Sutherland. Gunderson said he was told Friday that Sutherland approached an individual regarding a civil matter on a different living trust. No charges are filed in that matter, Gunderson said.
Valade’s son, Mark Valade, the current Carhartt CEO, sat through the day’s proceedings, but had no comment afterward.
Contact Christina Hall: [email protected]. Follow her on Twitter: @challreporter
Support local journalism. Subscribe to the Free Press.