Former Macomb prosecutor Eric Smith to stand trial for embezzlement
Correction: This story has been updated to correct the spelling of John Dakmak's name and the proper title of Mike Frezza.
Clinton Township — Former Macomb Prosecutor Eric Smith will stand trial on 10 charges, including embezzlement, a visiting judge ruled in 41-B District Court on Friday, ending a preliminary exam that started in July.
"The court finds that the state has met its burden by a probable cause standard," said Judge Cynthia Arvant said of the five counts of embezzlement over $50.
Smith faces 10 felony counts — five counts of embezzlement and one count each of conspiracy to commit forgery, accessory to a felony after the fact, evidence tampering, conducting a criminal enterprise and misconduct in office. The criminal enterprise count carries a penalty of up to 20 years in prison.
Smith resigned from office in March 2020 after facing criminal charges.
“When public officials fail to conduct themselves in accordance with the laws of our state, we must take swift action to restore the public’s confidence,” Michigan Attorney General Dana Nessel said in a Friday statement. “No one is above the law. The judge’s decision today, sending this to trial on all charges, affirms that.”
Assistant Attorney General Mike Frezza spoke for about an hour to start the Friday hearing, arguing that Smith should be bound over on all 10 charges.
Nessel's office contended that Smith used drug and drunk driving forfeiture monies as a slush fund, spreading it around town, whether for iPads for his kids' school or donations to area churches. They are notably all Christian churches, Frezza said
"This isn't private money, judge," Frezza said. "It's the money of the people. And Eric Smith wanted to spend it any way he wanted to."
Smith's defense attorney, John Dakmak, countered that there are "fatal flaws" in the state's case.
"What is the enterprise?" Dakmak asked. "Who is the victim in this case?"
Dakmak said if the allegedly misused funds were a criminal enterprise, "it was the worst one ever, because there was no gain. The money was flowing one way. The wrong way. Out the door."
Arvant noted that Smith's legal troubles were tied to a "turf war" between the Macomb County Treasurer's Office and the prosecutor's office over four accounts, which had been kept outside the treasurer's control.
It was the digging into those accounts that ultimately resulted in the criminal investigation and charges.
The case followed a year-long investigation involving the Attorney General’s Public Integrity Unit, the Michigan State Police and other agencies, and was prompted by a complaint filed by Macomb County Executive Mark Hackel. In the complaint, Hackel called for an investigation into inappropriate use of forfeiture accounts, Nessel's office noted.
Nessel's office has said an estimated $600,000 was embezzled since 2012. The funds were allegedly used to buy flowers and make-up for select secretaries in Smith's office, for a security system for Smith’s residence, garden benches for staffers’ homes, country club catering for parties and campaign expenditures, among other things.
Arvant ruled Friday that "the state has met its burden, by a probable cause standard, that there was financial gain. ...The ultimate intent of the defendant is for the trier of fact."
Also in court Friday was Derek Miller, a former aide to Smith. He was ordered to stand trial on a pair of five-year felony charges including misconduct in office and conspiracy to commit a legal act in an illegal manner.
The legal act, according to Miller's attorney, Steve Fishman, was changing Employer Identification Numbers connected to the government accounts in question.
"Without knowledge of the criminal conspiracy, there is no intent," Fishman said. "The only way it can become a crime is if you know the person is going to do an illegal act with that information."
"Unless there's some evidence of criminal intent, that's the end of the case," Fishman said.
But the prosecutor's office disagreed.
"Of course, Derek Miller knew what he was doing was wrong," Frezza said in his rebuttal. "That's why he changed the EINs."
"Reasonable inferences can be drawn from changing the EINs and then changing them back," Arvant said.
Fishman had urged Arvant to be the "trier of fact" in the case, and not "rubber stamp" the government by advancing the case to trial. He argued the charges against Miller should be dismissed without moving forward.
"Who are we kidding?" Fishman said. "Where is the evidence?"
Arvant said Miller was not "just swept up in this case."
"He knew Eric Smith did not want to provide access to the accounts," Arvant said. "This court is satisfied the court has met his burden."
Circuit court arraignments for Smith and Miller are set for 1:30 p.m. on Feb. 28.