Allegations suggest the designer conducted secret sales of Rhude merchandise to VIP clients, pocketing the proceeds.
Luxury streetwear designer Rhuigi Villaseñor, known for his Los Angeles-based brand Rhude, is facing a federal lawsuit alleging that he misappropriated company funds to support his extravagant lifestyle. The lawsuit, filed by George Robertson, a 20% stakeholder in Rhude, claims that Villaseñor used company funds for personal expenses including private jet travel, luxury vacations, high-end cars like Ferraris and Lamborghinis, and a collection of expensive watches.
According to the lawsuit, Villaseñor is accused of siphoning off funds from Rhude Companies for his personal benefit, while concealing sales by conducting private sales of Rhude merchandise to VIP clients and keeping the profits for himself. The lawsuit further states that despite the brand generating annual revenues of over $30 million USD, Robertson, as a co-owner, received minimal distributions as low as $41,000 USD per year.
Robertson seeks compensation and the removal of Villaseñor from his executive role at Rhude Companies. The lawsuit claims that Villaseñor abused his power and control over the brand's products, designs, bank accounts, and financial records to enrich himself at Robertson's expense.
Robertson, who invested $50,000 USD in Rhude in 2016, alleges that Villaseñor became jealous after Robertson contributed several successful product ideas. In 2021, Villaseñor reportedly offered to buy out Robertson's stake in the company for $5 million USD.
As of now, Villaseñor has not provided a statement regarding the allegations made in the lawsuit.
