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- X Strategies has sued its former CFO and co-founder Derek Utley, alleging he embezzled at least $5 million and used exclusive control over company finances to fund massive slot machine sessions at a South Florida Hard Rock casino.
- The civil RICO and fraud complaint claims Utley fed $29 million into slot machines over 200 days in a single year, allegedly making direct withdrawals from company bank accounts via casino ATMs and masking them as business expenses.
X Strategies has sued former co-founder, chairman, and CFO Derek Utley in federal court, alleging he embezzled at least $5 million and used company funds to gamble heavily on slots at a South Florida Hard Rock Casino.
The complaint, filed Sept. 18 in the U.S. District Court for the Southern District of Florida, centers on alleged misuse of company finances at a firm known for managing prominent Trump-related social media accounts. For gambling-industry readers, the case stands out because the lawsuit claims company money was funneled into casino accounts, ATM withdrawals, and slot play on a massive scale.
Lawsuit alleges 200 days of Hard Rock gambling
According to the complaint, X Strategies says Utley spent 200 days gambling at a South Florida Hard Rock property in a single year. The company alleges he fed $29 million into slot machines, won more than $26 million, and still ended up with a net loss of about $3 million.
X Strategies also alleges Utley used exclusive control over company finances to siphon off funds beginning in 2021. The lawsuit says he opened casino accounts, mixed company money with cash from other sources, withdrew funds directly from company bank accounts at online casino ATMs, and later categorized those withdrawals as client-entertainment expenses.
The company further claims that after gambling, Utley deposited remaining funds into personal casino accounts.
Claims include fraud, theft, and civil RICO
X Strategies said a forensic audit has identified at least $5 million it claims was embezzled, though it also said that review is ongoing. The lawsuit includes claims for civil RICO, theft, fraud, and breach of fiduciary duty, and seeks damages that could include treble damages.
The complaint also asks the court to impose a trust over assets allegedly bought with company money, including casino winnings as well as gambling rewards or status tied to that play.
Among the allegations in the filing, X Strategies says it learned Utley once called a third party late at night from a Las Vegas casino seeking an urgent cash transfer for payroll. The company alleges that request was actually meant to cover a gambling loss and allow him to continue gambling.
Utley disputes the allegations as case moves forward
Utley has denied wrongdoing. As cited in the source report, he disputed the lawsuit’s allegations and said they would be addressed through the legal process.
X Strategies was co-founded in 2017 by Utley and Trump adviser Alex Bruesewitz. The company alleges multiple banks had previously closed its accounts because of suspicious transactions.
What happens next is likely to come through court filings in the Southern District of Florida, where the civil case is now pending. The source report also noted that X Strategies said its forensic audit remains ongoing.
Source: As reported by casino.org.
