As an NFL player who learned saving money the hard way after splurging his first $100,000 on a burgundy convertible Mercedes-Benz SL, Dallas Cowboys legend Emmitt Smith understands what investments could mean. But he also knows that just like gambling, your investments don’t always end up in a profit. Recently, one of his choices ended up being a heavy loss, and not just monetarily.

Earlier this month, a company he joined hands with to invest in a solar project sued him and his associates for allegedly running a Ponzi scheme. As a victim of a Ponzi scheme himself, Smith understands what it feels like. And as a person who spent 13 years of his 15-year NFL career with a self-acclaimed gambler, Jerry Jones, he also knows not every bet goes in your favor. And this time, it wasn’t even his fault. So, when he had to speak up on the lawsuit, he had a very clear answer.

“Ultimately, the project could not be completed,” Smith said in a statement to The Dallas Morning News on Tuesday. “That outcome was a loss for everyone involved. It was an unsuccessful business venture. To be clear, I strongly reject any suggestion that I knowingly deceived Kituwah or engaged in misconduct.

“We entered this venture in good faith, believed in the opportunity and worked to make it successful. I understand that Kituwah is disappointed with the outcome. We are disappointed, too. But an unsuccessful business venture is not fraud. I intend to defend myself and my company against these allegations vigorously.”

According to the lawsuit filed August 31, in Delaware’s Chancery Court, Kituwah LLC filed a Verified Direct and Derivative Complaint against the former Cowboys running back Smith, his longtime business partner David Mosley, and their commercial real estate company, 4 13 Solutions Inc., Wilson Holdings of North America, LLC, and Jabez 4 10, LLC (Defendants) “to exploit Plaintiff for $2.5 million” for a solar project.

Kituwah LLC is seeking $2.5 million in damages “with appropriate interest” incurred since February 1, 2024, when the loan’s duration ended. In fact, Kituwah even gave Smith and his associates a free pass, suggesting that they won’t have to pay any interest if they pay the full amount. However, according to the company, their notices were “ignored” by them. But what Smith says also holds true with the events that actually happened.

Why Emmitt Smith may be telling the truth

Kituwah entered into business partnerships with Smith and Mosley in September 2023 to help fund Project Exodus, a renewable-energy project in Texas between Austin and San Antonio. Kituwah LLC, serving as the investment and economic development arm of the Eastern Band of Cherokee Indians, provided $2.5 million to aid the funding. They allege that Smith’s company, instead of filing for a loan with the Department of Energy (DOE) to proceed with their plan to obtain the farm or the rights to the GCI PSA, paid off their previous debts. Meanwhile, Smith explains that the government’s renewable energy regulations changed from 2020 to 2023.

“We believed in the project and worked to develop a viable business. Like the other parties involved, we understood that its success depended on securing the financing and approvals necessary to move the project forward. The environment surrounding renewable energy financing subsequently changed significantly. Government policy, incentives, and the availability of financing shifted, creating substantial challenges for projects like ours.”

This also clarifies another fact presented by Kituwah in its lawsuit.

In the lawsuit, it says that 4 13 Solutions used the money to pay Wilson Holdings, “with whom they had partnered on other ventures.” But it also claims Wilson Holdings was only supposed to receive repayment if Project Exodus secured permanent financing. Now, considering that Smith and his associates did believe in the project, it’s understandable why they paid off their previous debts to Wilson Holdings.

“Allegedly, the payment to Wilson Holdings was compensation for prior unsuccessful loans and investments that it made with 4 13 Solutions. Although the parties had entered into a contract to pay Wilson Holdings if Project Exodus had obtained permanent financing, that condition never came to pass. Smith and Mosley, through 4 13 Solutions, nonetheless misdirected Kituwah’s funds to pay Wilson Holdings, all the while representing to Kituwah that they had used the loan proceeds for their proper purpose.”

The lawsuit alleges that Smith and his partners, in 2023, made assurances about the project’s value, potential revenue, and chances of securing government-backed financing. Kituwah said Project Exodus was valued at $396 million and could generate nearly $14 million in net income during its first year. But it also proves Smith’s point of going all-in on the project. However, Kituwah’s lawsuit alleges fraudulent inducement, breach of fiduciary duty, and breach of contract, which still hold, considering Kituwah allegedly never heard back.

Smith retired after the 2004 season with 18,355 rushing yards. He spent 13 of his 15 NFL seasons with Dallas, won three Super Bowls, and was inducted into the Pro Football Hall of Fame in 2010.

For now, the allegations have not been established as facts in court. Smith has made his position clear: he considers Project Exodus a failed business venture and intends to defend himself and 4 13 Solutions against the claims.