Prosecutor: Carhartt heiress Valade's lawyer used her 'like a human ATM'

David Sutherland betrayed the late Carhartt leader Gretchen Valade, using her "like a human ATM," a Michigan assistant attorney general asserted during opening statements Thursday in the attorney's embezzlement trial.

"Trust. That's what this case is really about. Trust and betrayal," Scott Teter, division chief of the financial crimes division for the Attorney General’s Office, told jurors in Wayne County Circuit Court during his brief opening statement.

Sutherland, of Grosse Pointe Farms, is accused of embezzling several million dollars from Valade trust funds for which Sutherland was trustee.

He 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, the Attorney General's Office previously said.

Sutherland's attorney, James Joseph Sullivan, said he "would like to reserve my opening statement."

A jury of 15 people, three of whom will be alternates, was seated during the first day of the trial Wednesday, which consisted mainly of jury selection. Circuit Judge Paul John Cusick is presiding over the case, during which a total of several dozen witnesses may be called.

Sutherland was considered Valade's trusted friend

The trial is anticipated to go through at least the end of next week.

Teter told jurors that the case involves two trusts, a 1982 revocable trust and a 2009 irrevocable trust, and that Sutherland was trustee of both. He told jurors "you can't hurt the trust to help yourself," but Sutherland failed that.

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.

Teter told jurors she underwrote the Detroit Jazz Festival and opened the Dirty Dog Jazz Café in Grosse Pointe Farms. He told them her health began to decline in 2016 and she required 24-hour care a few years later. Teter showed jurors a photo of Valade at her 95th birthday in a wheelchair wearing what appeared to be colorful leis.

Valade obituary: Metro Detroit businesswoman Gretchen Carhartt Valade dies at age 97

He ticked off at least a half-dozen witnesses they would hear from during the trial, one of whom would testify that Sutherland wasn't just Valade's lawyer but also a friend. He said Valade trusted Sutherland and met with her at her home once a week.

Teter told jurors that Sutherland took out "millions and millions of dollars," and when confronted by one of his employees months later, Sutherland wrote a promissory note and backdated it, something that he did for two separate years. Teter said the notes were for $5 million each, but told jurors Sutherland took more money in each of those years.

An oil company and a pizza franchise

He told jurors there was "no note, no I.O.U., no nothin'."

Teter said Sutherland drafted the 2009 documents that gave him his authority over the trusts and that he billed Valade $19,000 a month to serve as her attorney and trustee. "That wasn't enough," he added.

Teter told jurors Sutherland used Valade's money to pay for his investments, including a pizza franchise in Florida and an oil company in northern Michigan that were failures but used Valade's money to stay afloat.

He said Plante Moran, a certified public accounting and business advisory firm, questioned why money was moving in and out of the 2009 trust. Teter told the jury that Sutherland didn't stop until he was removed as trustee.

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

First-day witnesses

Prosecutors called three witnesses, including Michelle Singleton, who worked for Valade for 23 years, caring for Valade's home and then Valade personally in her later years; and Edward Doyle, an investigator with the Attorney General's Office. The third prosecution witness, Dawn Jinsky, a partner at Plante Moran, is to be cross-examined Friday when the trial resumes.

Singleton testified that Sutherland came to Valade's house every week or every other week and an accountant would leave an envelope for him, sticking up out of a book. She testified that she did not sit in on the meetings between Valade and Sutherland and was not involved in Valade's financial matters. She said a friend of Valade's, Tom Robinson, also would be at the house regularly and meet with Sutherland.

Singleton testified that Valade bought her a house and offered to buy her a car. She also testified about Valade's changing physical condition.

Doyle, who investigates vulnerable adult financial abuse cases, testified that the Attorney General's Office received a letter from the Honigman law firm in March 2022, authored by Matthew Schneider, a former U.S. attorney, and that members of the state Attorney General's Office met with Schneider and another attorney from the law firm in April 2022.

Shortly thereafter, he testified, there was a meeting with Plante Moran. In May 2022, he testified, there was a meeting in Valade's home involving Valade; her son, Mark Valade, who is chairman and CEO of Carhartt; and a Honigman attorney. In August 2022, he testified, search warrants were executed at Sutherland's law office and at the home of one of Sutherland's employees.

Doyle testified that he looked at nonprofit and business associations Sutherland had. Earlier this month, he testified, he found that Sutherland was paying taxes on two homes that are less than a mile from each other. One home was purchased in 2004, the other in 2020. The purchase value of the home bought in 2020 was $1.7 million.

Asked whether there was a connection between the properties and allegations in this case, Doyle said there was "nothing I could run back to the house."

Jinsky testified that Valade had been her client since 2017. She said she had some concerns because of some of Valade's real estate investments, and expressed her concerns to Valade's son at the end of 2019.

She said Valade created the 2009 irrevocable trust to hold a life insurance trust. Asked the state of the 2009 irrevocable trust, she testified it is now in debt by $60 million.

Jinsky testified that the trustee is the person responsible for such as trust. Plante Moran took over as trustee of the irrevocable trust in August 2020, once Sutherland was removed as trustee, and learned it was in debt.

"It was shocking," Jinsky testified, adding there was missing data in statements from Sutherland's office and it was unclear where the money went. She said there was some debt to fund Sutherland businesses and his personal purposes.

Sutherland also is accused of stealing from the trust of a Grosse Pointe Farms school in a separate case that will be tried later. He's charged with one count of embezzlement of $100,000 or more in that case.

In that case, attorneys with the state Attorney General’s Office said the 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: @challreporter.

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This article originally appeared on Detroit Free Press: Prosecutor: Carhartt heiress Valade's lawyer used her 'like a human ATM'