Marble City Market says SmashCity owners embezzled $190K while managing the food hall

Paul and Ashley Moody were supposed to turn things around at Marble City Market. Instead, says food hall co-owner Doug White, the married couple he hired to manage his business embezzled more than $190,000.

The Moodys stand as prominent figures in the local restaurant scene as the owners of Knoxville-based burger company SmashCity. Their SmashCity brand also has a location in Omaha, Nebraska, and briefly set up shop at the West Knoxville location of Honeybee Coffee, which is now embroiled in its own financial drama under new ownership.

The Moodys took over managing Marble City Market in 2022 after the food hall parted ways with its original manager, Hospitality HQ, which was facing its own criticism amid a wave of disagreements and severances with vendors. Knox News reported in June 2023 the Moodys would be leaving their new position as managers − a mutual decision made with the owners, they said.

We now know White contacted law enforcement July 18, 2023, to report Paul Moody had embezzled roughly $190,900 from RSQ Management. White is identified in a Knoxville Police Department report as the co-owner of RSQ, which he said owns Marble City Market.

The report based on White's account asserts Paul Moody:

• Stole $876 in cash and wrote a check to SmashCity for $20,000 without White's authorization
• Made "several deposits" totaling $36,595.94 to his own account instead of RSQ Management's account
• Made two transfers to his own account from RSQ Management in January 2023 for a total of $30,999.76

White provided police with copies of fraudulent charges and transactions, according to the report, and was instructed to file an embezzlement complaint. Paul and Ashley Moody now face a charge of theft greater than $250,000, a Class A felony in Tennessee.

They have a court date set for Oct. 8.

Knox News briefly spoke with Paul Moody on July 8 and explained we were looking to talk about the allegations. He said he would call back but never did. Knox News also spoke with a representative of the food hall's ownership group, who said all owners are declining to comment.

Paul Moody has not responded to three text message requesting comment sent between July 8 and July 11.

Around the time the Moodys were departing Marble City Market as managers, they also announced their plans to pull SmashCity from the food hall as a vendor. The business moved to the former OliBea location at 211 S. Central St., where it continues to operate.

Ryan Wilusz is the growth and development editor. Phone 865-317-5138. Email ryan.wilusz@knoxnews.com. Instagram @knoxscruff.

Support strong local journalism by subscribing at subscribe.knoxnews.com.