Florida-based X Strategies has sued former co-founder and chief financial officer Derek Utley, alleging he embezzled at least $5 million from the company, including $3 million lost through slot machine gambling.
The lawsuit, filed in the US District Court for the Southern District of Florida, claims Utley used company funds for casino activity and personal spending. Utley denies the allegations, which have not been proven in court.
X Strategies alleges Utley had exclusive access to its bank accounts and financial records, allowing him to redirect company money. According to the complaint, he wagered approximately $29 million of company funds on slot machines at one casino during 2025, ultimately losing $3 million.
The company also alleges that diverted funds paid for luxury sports cars, designer clothing, expensive accommodation and holidays over several years.
Trump-linked social media company says irregularities emerged this year
X Strategies operates the Trump War Room and Team Trump accounts on X, according to Politico. Utley founded the company with chief executive Alex Bruesewitz in 2017. As chairman and CFO, he held substantial responsibility for its finances.
Court filings say the alleged irregularities were discovered after Michael Seifert joined X Strategies as president earlier this year. The complaint states that Seifert found discrepancies indicating the business should have held significantly more cash than was available.
Utley resigned from his executive roles in April and surrendered his 50 per cent ownership stake, according to the lawsuit. The court has not determined whether the company’s allegations are accurate.
Utley and co-defendant reject the company’s allegations
Utley has disputed the claims and said he intends to address them through the court process. “I dispute these allegations in the complaint and will address them through the legal process. I have no further comment at this time,” he told Politico.
Bruesewitz has declined to comment beyond the court filings. The lawsuit also names Utley’s former girlfriend, Anna Weisheimer, as a co-defendant and alleges she helped launder money.
Weisheimer denies the accusation, saying she was not involved in the dispute between the company’s founders and has requested to be removed from the case. No court has ruled on the allegations against either defendant, meaning the claims remain contested.
Political communications face separate scrutiny over information access
The case comes amid separate scrutiny around services connected to Trump’s digital communications. Questions have recently been raised about Truth API, a premium service linked to Trump’s Truth Social platform that provides paying subscribers with faster access to content posted on the network.
Critics have argued that earlier access to presidential communications could potentially give traders an advantage in prediction markets when announcements, endorsements or policy developments affect contract prices.
Dustin Gouker, founder of advisory firm Closing Line Consulting, recently told SiGMA News that speed can carry significant value in prediction markets because prices may react within seconds to important developments.
Furthermore, the discussion comes as regulators and industry participants pay more attention to potential insider trading and information advantages within prediction markets. Platforms including Kalshi and Polymarket have introduced additional monitoring systems this year intended to identify possible misuse of non-public information.
The X Strategies lawsuit concerns alleged misuse of company funds rather than prediction-market trading. Its allegations remain subject to the federal court process.
The X Strategies case shows how gambling harm can move beyond individual loss when financial controls inside a business are weak. These allegations remain to be tested in court, but the reported scale raises difficult questions about oversight and how warning signs were missed before the losses accumulated.
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