Luxury Dog Clothes

Was Luxury Startup a Gussied-Up Lie?

He New York fashion world certainly has its share of poseurs and pretension, but this time instead of snooty fashionistas, it is the Manhattan District Attorney’s Office and a trio of allegedly duped investors who are involved.

Prosecutors say Andrew Albert, who formed a company called Virtual Etail Group LLC to develop a luxury site called On1Ave.com, actually bilked three investors out of nearly $600,000 by funneling tens of thousands of dollars to another “nearly defunct” media company that he formed in 2004 called Equation Entertainment and taking more out in ATM and cash withdrawals for his own living expenses.

The 49-year-old was indicted Monday on felony charges of grand larceny, criminal tax fraud, and scheme to defraud.

“Andrew Albert falsely told investors that his shopping website would feature a virtual street akin to famous retail boulevards like Madison Avenue or Rodeo Drive,” said District Attorney Cyrus Vance Jr. in a release announcing the charges Monday . Instead, the company he started turned out to serve as “nothing more than a bank account that the defendant used to pay for his personal expenses and lavish lifestyle.”

Said lifestyle, according to the D.A.’s office, included dropping $20,000 on clothing and accessories, moving with his wife from a small Greenwich Village apartment to a spacious loft in Tribeca—which cost an additional $2,000 a month in rent—and spending more than $51,000 to furnish and renovate the loft.

In addition, between June 2008 and February 2010, he stands accused of using investor money to buy $26,000 in groceries from Citarella and D’Agostino, and spending $6,700 on dog grooming, pet food, and veterinary bills. Those were the highlights cited by Vance, but prosecutors say he used nearly $350,000 stolen funds on his own expenses.

His wife, New York socialite Annie Churchill, was not charged, and she told the New York Times that her husband is innocent and will be vindicated.