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Former Portland Marathon organizer indicted on embezzlement charges

Runners start the Portland Marathon in an OPB file photo from Oct. 6, 2019. A former organizer of the marathon faces charges of embezzling from the nonprofit that runs the race.
Kaylee Domzalski
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Runners start the Portland Marathon in an OPB file photo from Oct. 6, 2019. A former organizer of the marathon faces charges of embezzling from the nonprofit that runs the race.

A grand jury has indicted the former organizer of the Portland Marathon on charges of embezzling more than $1 million from the nonprofit’s coffers.

The jury’s indictment, issued Thursday, accuses Lester Smith, 80, of stealing funds from the nonprofit between 2012 and 2018. Smith had been the president and director of the Portland Marathon at the time. He has since moved to Tomball, Texas.

Smith has been charged with wire fraud and tax evasion.

The indictment alleges Smith stole money to fund home remodeling projects, shopping sprees at high-end department stores and other luxuries.

Smith led the Portland Marathon as the president and event director from 1982 to 2017. Starting in 2012, Smith either directly or indirectly — through someone called “Person A” in the indictment — had funds transferred to his personal accounts, according to the indictment.

Prosecutors also said Smith used a check from the Portland Marathon’s accounts in 2015 to purchase a $60,000 Infiniti sport utility vehicle under the organization’s name, then re-registered it under his wife’s name two years later. The indictment also says he used the nonprofit’s funds to pay the personal rent of “Person A,” then had them repay some of those funds directly into Smith’s banking account.

Person A was in charge of the marathon’s QuickBooks software accounting documents, the indictment says, and Smith had them disguise many transfers as “Note Receivable” in those documents.

The indictment adds that Smith underreported his taxes, since he failed to report the disguised income he received from the Portland Marathon.

Smith’s final years with the Portland Marathon were mired with controversy. In 2016, police threatened to shut down the race when the marathon failed to implement a crowd safety measure, according to The Oregonian/OregonLive. A number of runners that year ran off course.

Portland officials initially denied the marathon its permit the following year, because Smith refused to change the race route to accommodate a police shortage.

The following year, the Oregon Department of Justice found that Smith stole more than $865,000 from the Portland Marathon. The race was canceled that year. It’s now under new leadership.

Smith will make his first appearance in federal court March 10. Wire fraud is punishable by up to 20 years in federal prison and a $250,000 fine. Tax evasion is punishable by up to five years in federal prison and a $250,000 fine.

Copyright 2022 Oregon Public Broadcasting. To see more, visit Oregon Public Broadcasting.

April Ehrlich began freelancing for Jefferson Public Radio in the fall of 2016, and then officially joined the team as its Morning Edition Host and a Jefferson Exchange producer in August 2017.