The glamorous designer of Meghan Markle’s £56,000 engagement dress has accused her former business partner and boyfriend of stealing millions of pounds from their luxury fashion label Ralph & Russo, contributing to its collapse.
For a decade, Tamara Ralph and Michael Russo were one of the most formidable couples in fashion, with A-list clients including Gwyneth Paltrow, Angelina Jolie and Kylie Minogue.
But explosive court documents, seen by The Mail on Sunday, claim their professional relationship fell apart because Russo bullied and harassed her after she tried to stop him from looting huge amounts of their company.
Earlier this month, we revealed how both Ms. Ralph and Mr. Russo had been accused in legal documents of looting millions of pounds from the renowned fashion label to fund their jet set lifestyle.
For a decade, Tamara Ralph (pictured) and Michael Russo were one of fashion’s most formidable couples, with A-list clients including Gwyneth Paltrow, Angelina Jolie and Kylie Minogue
We also reported allegations that Ralph & Russo’s pension pot had been looted before it went into administration in March, and that £2.8m was owed to the IRS. The Serious Fraud Office and the Pension Supervisor have been warned about allegations of financial abuse.
Ms Ralph, 39, who is being sued by the company through its trustees for £20.8m in damages in the Supreme Court, has always denied the allegations. Now, in extraordinary legal documents detailing her defense, she claims:
- Investigations revealed that Mr. Russo was spending corporate money at a casino in London’s Mayfair and renting a secret LA property;
- He used the label’s money to fund a trip to Dubai, where he booked adjoining penthouse hotel suites;
- He went behind her back and bought a luxury Range Rover with company money;
- She tried to block him from using the company’s bank account;
- Mr Russo launched a campaign of ‘bullying, intimidation and abuse’ against her;
- The stress caused by Russo’s behavior and the denunciation by an investor company caused Mrs. Ralph, who was pregnant at the time, to be hospitalized;
- Russo was fired as CEO of the company last October for his “abusive behavior” towards her.
The glamorous designer of Meghan Markle’s (pictured) £56,000 engagement dress has accused her former business partner and boyfriend of stealing millions of pounds from their luxury fashion label Ralph & Russo, contributing to its collapse
Australian Mrs. Ralph and Mr. Russo founded their label in 2010. They gained worldwide fame in December 2017 after designing the black beaded bodice dress worn by Meghan for her official engagement photos.
The court documents claim that their romance ended in 2017 and that their professional relationship “deteriorated steadily from 2019 onwards due to the discrimination, abuse, harassment and bullying of Ms. Ralph by Mr. Russo.”
It is alleged that the company’s chief financial officer warned Ms. Ralph in late 2019 that Mr. Russo had made “large cash withdrawals” “that did not appear to be for business purposes.”
In February 2020, she was warned that the company was violating an agreement that no more than £2.5m could be paid out in so-called ‘director’s loans’.
Ms. Ralph says she told Mr. Russo to stop withdrawing money and “pay back the amounts he owed.” But the documents allege she was ignored and that in March Russo “used corporate funds to book three first-class flights and interconnected penthouse hotel suites in Dubai.”
It is alleged that Ms. Ralph attempted to halt Mr. Russo’s spending the following month by insisting that both she and the company’s chief financial officer approve future payments, but again he refused to comply.
Ms. Ralph says her attempts to challenge her business partner’s behavior caused his “campaign of bullying, harassment and abuse” to become increasingly hostile “and escalated into repeated threatening statements that he wanted Ms. Ralph to die.” She claims this caused her panic attacks.
In a further extraordinary twist, Ms. Ralph claims that Mr. Russo’s alleged abusive behavior resulted in his being fired on October 9, 2020 for gross misconduct. The trustees last night claimed that Mr. Russo had already left the company seven months earlier, leaving Ms. Ralph in “some charge” in the year before the collapse. However, a source close to Ms. Ralph disputed this story, saying that Mr. Russo and a new CEO served as directors during this period.
The trustees have accused Ms. Ralph of spending thousands of pounds of the company’s money on luxury hotels, business class flights, lingerie, yoga classes, beauty treatments and hair appointments. But she denies that she robbed the company of its cash reserves and used her money to fund an extravagant lifestyle. She says her use of the company’s expense account was “completely transparent.”
Of the money she has taken out in so-called driver loans, she says she will repay £316,000 and plans to repay the outstanding £195,000.
Explosive court documents, seen by The Mail on Sunday, claim their professional relationship fell apart because Mr Russo (pictured) bullied and harassed her after she tried to stop him from looting huge sums of money from their company
She blames her ex-partner for the millions that have disappeared. “Mr. Russo abused his position as CEO and his access to the company’s bank account and associated debit card by embezzling millions from the company and taking steps to conceal this embezzlement,” the legal documents say.
Ms Ralph, who now lives in the south of France with her billionaire boyfriend, Bhanu Choudhrie, admits that the company bought a Rolls-Royce in 2017 but says it was used for business purposes and she believed it helped boost the fame of the company would increase. She alleges that Mr Russo used company funds to buy a Range Rover without her knowledge and then subjected her to ‘severe assault’ when she objected.
Her legal papers also allege that Mr Russo used company funds to pay for two rental properties in London, which appear to have been used by his girlfriend. And it is alleged that the company also paid for a rental property in Los Angeles that was incorrectly described as located in Dubai, where the label had opened a boutique.
Ms Ralph alleges that earlier this year administrators and property developer Nick Candy, whose company Candy Ventures Sarl lent the fashion house £17 million, pressured her to continue with Mr Russo, who remained director despite allegedly being fired as CEO. . This pressure was exerted despite “detailed knowledge of Mr. Russo’s gross misconduct towards Ms. Ralph,” the statement reads.
The trustees, Begbies Traynor Group and Quantuma Advisory Ltd, said: ‘Mr Russo left the company in March 2020 (when he moved to Dubai), leaving Ms Ralph alone in charge from then on. As set forth in the lawsuit against her, the misuse of pension funds, tax payments and misuse of corporate funds under her supervision has occurred from March 2020 until the administration on March 17, 2021.”
Candy Ventures Sarl said: ‘Over £70 million in investment has been lost, pension money has been stolen and company accounts misrepresented. This is serious financial misconduct and we look forward to the evidence presented in the High Court.”
A former employee said, “I am shocked by the legal claims against Tamara Ralph. It’s unimaginable that corporate funds and pension contributions from hard-working staff could have been used to fund Tamara’s extravagant lifestyle in the South of France when she should have been trying to save the company and save jobs.”
A spokesman for Mr Russo said he was not involved in an executive decision nearly a year before the company went under management.
He added: ‘Mr. Russo is both surprised and saddened that Tamara Ralph has chosen to make such serious, misleading and false charges against him as part of her defense of the claim against her by Ralph & Russo’s trustees. . Mr. Russo has worked tirelessly with Ms. Ralph for over a decade to build the company from scratch into a global brand and has nothing but the utmost respect and admiration for her.”
In a statement, Tamara Ralph said: “I will make others reflect on the irony of Ralph & Russo’s female founder, the creative force and face of the brand, who is bullied, unfairly blamed and the target of financial mismanagement.” despite efforts to prevent it. Moreover, it is terrible to be the victim of a public smear campaign.’