Nude Photos Sunk American Apparel Founder Dov Charney allegedly allowed them to be posted By Evann Gastaldo, Newser Staff Posted Jun 22, 2014 6:07 AM CDT 12 comments Comments In this April 3, 2012 photo, Dov Charney, founder of American Apparel, is photographed at the company's factory in downtown Los Angeles. (AP Photo/Los Angeles Times, Gary Friedman) (Newser) – Dov Charney has faced years of sexual harassment complaints—so what was the final straw that got him booted as American Apparel's CEO? Nude photos, according to an insider who spoke to the New York Times. The source says Charney knew that one of his employees planned to publish naked photos of another former American Apparel employee: Irene Morales, the woman who sued Charney in 2011, claiming he started sexually harassing her when she was 17 and turned her into a sex slave when she was 18. Charney allegedly did not stop the unnamed employee from posting the pictures on the Internet; indeed, Charney claimed the photos proved that Morales had actually pursued him. In March, the board learned that Charney knew the images would be posted, and opened up an internal investigation into his behavior which also found that he had allegedly misused company resources. But another source says Charney had actually told board members about the plans to post the naked pictures on a blog, although the first insider disputes this and says no board members knew they'd be posted. That insider and another also say Charney was given the choice to resign as CEO but stay on as a consultant being paid about $4 million; he refused and was fired. Insiders also tell the New York Post the naked pictures were allegedly posted on a blog purportedly belonging to Morales, and it's illegal in California to falsely impersonate others online. More woes for Charney: On Friday, a video of him dancing naked in front of two female employees surfaced.