NFL career rushing leader Emmitt Smith is facing a lawsuit from a Native American investment company that alleges the former Dallas Cowboys running back and his business partners misappropriated a $2.5 million loan intended to finance a wind farm project in Texas.

Kituwah LLC, which invests in business opportunities on behalf of the Eastern Band of Cherokee Indians, a federally recognized tribe based in North Carolina, filed the suit this week in Delaware. The company claims 4 13 Solutions used the loan proceeds to repay an investor from previous dealings with Smith's company.

Attorneys for Kituwah said Smith and his longtime business partner, Pro Football Hall of Famer associate David Mosley, misrepresented their efforts to obtain a U.S. Department of Energy loan that would have triggered repayment to Kituwah.

According to the complaint, the loan has accrued roughly $600,000 in interest, and Kituwah is asking a jury to determine damages. A message sent to 4 13 Solutions was not immediately returned, and the filing contained no information on an attorney for Smith or his company. The allegations have not been tested in court, and the defendants have not yet publicly responded to the claims.

The lawsuit states that Darrel Wilson of Wilson Holdings of North America LLC told Kituwah he accepted a $2.5 million payment from Smith's company but said he did not know what prompted it. Kituwah's attorneys described the arrangement as "essentially, like a ponzi scheme."

Kituwah claims Wilson Holdings was to be repaid only after the wind farm project—known as Project Exodus, located between Austin and San Antonio—secured permanent financing.

"Smith and Mosley knew this was improper," the lawsuit said. "Instead of telling the truth, they represented to Kituwah that 4 13 Solutions had used the money to acquire Project Exodus as promised, but that the acquisition had been held up for one reason or another."

The complaint alleges Smith and his partners never satisfied the requirements for obtaining government funding and repeatedly made excuses for why the project was not moving forward, or stopped responding to requests altogether.

Kituwah said it delivered the funds on Sept. 1, 2023, expecting repayment within months. The lawsuit said 4 13 Solutions promised the wind farm would be operational by December 2024, yet just a month before that deadline, Kituwah had seen no evidence the project even existed.

Kituwah said Smith and his partners claimed the wind farm was valued at $396 million and would generate nearly $14 million in net income in its first year. Texas has been one of the leading states for wind power capacity in the United States, and projects in the state have frequently relied on layered financing arrangements involving private lenders and government loan programs.

Smith, 57, spent the first 13 of his 15 NFL seasons with the Cowboys, winning three championships and earning MVP honors in Super Bowl 28. He broke Walter Payton's career rushing record in 2002 and finished with 18,355 yards. The case now moves into the litigation process, where the next notable milestones would be responses from the defendants and any court rulings on the claims.

Source: Fortune