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"HOUSEWIVES" TAYLOR & HUBBY

ACCUSED OF

INVESTMENT SCAM

7/29/2011 5:20 PM PDT BY TMZ STAFF

0729_russell_taylor_armstrong_ex_3
"Real Housewives of Beverly Hills" star Taylor Armstrong and her soon-to-be ex-husband are now co-defendants in a lawsuit accusing them of shady business dealings.

Two weeks after Taylor filed to divorce Russell Armstrong ... they're both being sued over allegedly misleading investors in a company called NuWay Digital Systems, Inc. (NDS).

Russell -- a venture capitalist -- was CEO of NDS -- which held interest in another company called MyMedicalRecords.com (MMR).

In the lawsuit, MMR claims Russell collected more than a million dollars by selling off NDS shares to investors who were told they were getting a piece of MMR.

The suit claims Taylor and Russell  "successfully and secretly" funneled money away from MMR and into their own pockets -- allegedly using the money to invest in a schmancy restaurant with Eva Longoria ... and to redecorate their mansion.

MMR and the Armstrongs reached a settlement over the whole mess ... and the lawsuit claims they have breached that agreement.

MMR wants $1.5 million to make things right.

UPDATE: Russell's attorney Ronald Richards claims MMR is struggling economically and describes the lawsuit as "groundless" and a "shakedown."


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