Selena Gomez's team denies fraud allegations over mental-health start-up
Selena Gomez's legal team has pushed back allegations that the actress committed fraud by failing to fulfill duties to build and promote her mental health start-up.
In a report by PEOPLE, Gomez’s litigator, Mathew Rosengart, asserted that the allegations "are completely meritless, both factually and legally."
"We will vigorously defend these false allegations and indeed are filing a motion to dismiss the baseless claims against her," he added.
Gomez is being sued by two companies, Wondermind SRS 44 LLC and Bespoke Wondermind LLC, after they had funded her mental health business Wondermind Global.
The investors reportedly funneled nearly $1.2 million (P73 million) into the company, but were kept in the dark as it “quietly collapsed around them.” As reported by Forbes in May last year, Wondermind had been in a crisis after "apparently running out of cash and failing to pay its employees," resulting in two-thirds of its staff being laid off.
The lawsuit further argued that Gomez and other company leaders failed to deliver on promises, including creating a mobile app.
"Gomez purported to sign a contract obligating her to perform and then ignored it," the lawsuit said.
"There was no legitimate enterprise in the works, much less a lucrative one," the plaintiffs added, saying that the company failed to meet "even its most basic obligations, such as timely paying its employees and vendors."
However, a source told PEOPLE that the actress did take action when she learned of the company's outstanding debts.
"Selena has invested millions of dollars over the years into Wondermind to support her mother and their shared passion for mental health, including when she was alerted about the most recent financial setback, and immediately invested more money as she’s not involved in the day-to-day operations," the source claimed.
Wondermind was launched in 2021 to help users strengthen their "mental fitness." Gomez had co-founded it together with her mother Mandy Teefey and their former business partner Daniella Pierson.
