The husband of a New York socialite has been accused of tricking a group of investors out of $590,000 - which was meant for a shopping website they say he never intended to create.
Instead, it has been claimed that Andrew Albert spent the cash on a lavish lifestyle which saw thousands of dollars paid out for groceries, pampering his dog and moving to a plush loft apartment in Manhattan's Tribeca district.
The 49-year-old, married to Annie Churchill, is also said to have blown $20,000 on clothing, more than $9,000 on looking after his hair, and nearly $6,000 at health clubs.
He pleaded not guilty in Manhattan state Supreme Court on Monday to charges of grand larceny, scheming to defraud and criminal tax fraud.
Prosecutors said Albert, of New York, had told investors he was about to launch a high-end shopping website called ON1AVE.com.
It would eventually become the Facebook or Amazon of online shopping, he claimed.
Visitors to the site would use an online avatar to 'walk' down a virtual street where they could 'shop' in the stores, which would be linked to actual firms like Prada, H&M and Ralph Lauren.
The avatar would be programmed with the shopper's measurements, so users could 'try on' the garments before buying them. But the court heard that the venture was, in fact, a 'sham'
Manhattan District Attorney Cyrus Vance said: '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.
In reality, the company he created served as nothing more than a bank account that the defendant used to pay for his personal expenses and lavish lifestyle.
'The defendant's elaborate deception defrauded investors of more than half a million dollars.
José Fanjul, an assistant district attorney, added in court: 'The defendant has shown he is untrustworthy and a self-interested character and is willing to put his own desires ahead of others.
According to documents filed in court, Albert formed a company called Virtual Etail Group LLC (VEG) in June 2008. That winter he started looking for investors.
He told prospective partners they would not only be funding the development of the site, but would also become VEG employees and equity members.
When specifically asked how he would support himself during the development period, Albert assured investors that he had savings from other projects, as well as stocks and bonds.
Prosecutors said that, by June 2008, he had convinced his first investor to put $250,000 toward the online venture.
Later that year another investor put up $100,000, while in autumn of 2008 a third person stumped up $240,000.
The investors claiming to have been defrauded are Michael Bedrick, described as a close friend of Ms Churchill; three family members, William, Christopher and Maggie Heath; and a group called the Robert Johnston Family Trust.
They were each handed an equity share of the firm. The cash was placed into a company bank account, of which Albert was the sole signatory.
Prosecutors say Albert then started to transfer tens of thousands of dollars to an account in the name of Equation Entertainment LLC, a nearly defunct media consulting business he had formed in 2004.
They allege he used the account, for several years, to pay for rent, clothing, health and beauty expenditures, groceries, restaurants, and other personal expenses.
He also used some of the money to move from a small apartment in Greenwich Village to a large $2,000 a month loft in Tribeca, it is claimed.
Furthermore, it is claimed he used $51,000 to renovate the property, and $12,000 on moving and storage.
And, at the time he was pushing the project, Albert was said to be heavily relying on his wife, who is not implicated in the investigation and has publicly backed her husband, for money.
'He’s innocent, and he’ll be vindicated - definitely, without a doubt,' she told the New York Times during a brief telephone interview.
Albert has been released without bail and his lawyer George A Farkas said his client denied defrauding anyone.
Mr Farkas added: 'This is absolutely nothing but investors in a high-risk venture not having the patience to wait. There is still time for this venture to get off the ground — maybe, maybe not.'
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