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Ex-Financier C. Arnholt Smith Released From Custody

July 21, 1985

SAN DIEGO (AP) _ Former financier C. Arnholt Smith regained his freedom early Sunday after serving eight months of a one-year sentence for his conviction on grand theft and tax evasion charges.

The 86-year-old Smith, who had been named ″Mr. San Diego″ in 1966, left the county’s minimum-security Work Furlough Center about 12:45 a.m. and was picked up by his bodyguards, said Jack Peci, spokesman for the city’s probation department.

Smith was released early, officials said, because of excellent behavior while in custody. He was one of a small group of inmates allowed to work on the grounds.

Peci said he had no idea where Smith went after leaving the center.

Smith, whose billion-dollar business empire once included the San Diego Padres baseball club, Yellow Cab Co. of San Diego, and the now-bankrupt U.S. National Bank, was not met by family members, Peci said.

Maria Helen Smith, his wife of 16 years, filed for divorce last week, citing irreconcilable differences. She and Smith were married July 21, 1968, and separated March 26, according to the petition.

Smith’s first wife, Eloise, divorced him in March 1968 after 42 years of marriage.

The minimum-security center, inhabited mainly by men convicted of drunken driving, had been Smith’s home since January, when he was transferred there after surrendering to authorities Nov. 26 and serving 42 days in the downtown jail.

In May 1979, Smith was convicted on one felony count of grand theft for stealing $8.9 million from his securities company, Sovereign State Capital. In addition to the theft, Smith was convicted on four felony tax fraud charges and sentenced to three years in county jail.

The 4th District Court of Appeal later upheld the grand theft charge but reduced the fraud convictions to misdemeanors.

Smith’s sentence was reduced to one year in jail and he was placed on five years’ probation, but he remained free for five years while attorneys appealed the case. When the appeals finally ran out late last year, Smith surrendered.

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