Trump-Aligned Firm Sues Co-Founder, Alleging Embezzlement
Social media applications X, instagram, LinkedIn, discord, reddit, Threads, Facebook on smart phone screen. (Credit: hocus-focus via iStock)
The firm that runs some of President Donald Trump’s most prominent social media accounts is suing one of its co-founders, accusing him of embezzling at least $5 million in company money, according to a lawsuit filed this week.
The lawsuit, filed in federal court in Miami, alleges that Derek Utley embezzled millions of dollars from X Strategies between 2021 and 2026, using the stolen money to fund an increasingly “extravagant lifestyle” and gambling addiction.
Utley, who served as the firm’s chairman and CFO until his department this year, founded X Strategies in 2017 with Alex Bruesewitz, a close ally and adviser of Trump. The firm manages some of Trump’s biggest social media accounts, including the Trump War Room and Team Trump accounts on X.
The lawsuit, which was first reported by Politico, accuses Utley of exploiting “his exclusive control over X Strategies’ finances and the position of trust he held as a senior officer of X Strategies to siphon off funds for his own personal benefit.” It alleges that he disguised personal expenditure as business expenses and gambled away stolen funds.
In a statement to Politico, Utley disputed the allegations made in the lawsuit and said that they will be addressed through the legal process.
The alleged embezzlement, according to the complaint, was discovered earlier this year by Michael Seifert, a South Florida businessman and friend of Utley and Bruesewitz who had been hired as X Strategies’ president. Immediately after starting the job, the lawsuit says, Seifert noticed that the firm’s cash on hand was “mathematically inconsistent with its reported revenues” and that it should have had “millions of dollars more in cash than it actually did.”
Seifert ultimately confronted Utley about the alleged embezzlement, which Utley initially denied before admitting that he had stolen the money, according to the complaint. Seifert and Bruesewitz concluded that Utley could not continue on in his role at X Strategies, and in April, Utley’s company voluntarily relinquished its ownership stake in the firm and he resigned as chairman and CFO, the lawsuit says.
According to the complaint, the firm allowed Utley to work as a “normal W-2 employee on a temporary basis, with tight restrictions and expectations, if he committed to honesty, integrity, and seeking treatment for his gambling and alcohol addictions,” though that arrangement was ultimately unsuccessful. He was ultimately terminated from his role at the firm.
