X Strategies, a political consulting firm managing several of President Donald Trump's social media accounts, has filed a lawsuit against former co-founder Derek Utley. The firm accuses Utley of embezzling over $5 million, alleging he misappropriated company funds for personal luxuries, including luxury cars, designer clothing, and first-class travel. The lawsuit was filed in federal court in South Florida on Monday.
According to the lawsuit, Utley, who served as chair and chief financial officer, allegedly engaged in a yearslong scheme that funded a lavish lifestyle and gambling addiction. The complaint includes claims of civil racketeering, civil theft, fraud, and breach of fiduciary duty.
Utley disputed the allegations, stating he would address them through the legal process. The lawsuit claims that from 2021, Utley siphoned funds from X Strategies, spending significant time gambling at casinos and incurring losses. In 2025, he reportedly spent 200 days gambling at the Seminole Hard Rock Hotel and Casino, using $29 million in company funds to win over $26 million, resulting in a net loss of $3 million for the firm.
The lawsuit also alleges that Utley used company money for personal investments and to purchase a Miami fitness studio. The alleged misconduct came to light after the firm hired a new president who noticed discrepancies in the company's finances.
Utley resigned in April but remained employed until issues with attendance and performance arose. He later requested medical leave, claiming an injury from a car accident, but the lawsuit alleges he submitted fabricated medical records. X Strategies subsequently terminated his employment. The firm claims Utley continued to target them post-termination by misinforming clients and soliciting business for a competing venture.