Oren Kaplan, who left the band in 2012, alleges Hutz has taken more than $500,000 (£312,500) from the group without permission. He is asking for $950,000 (£593,750) in personal damages, and claims the singer "tricked" other band members into signing consent forms to kick Kaplan out of the group.
According to the suit, the pair once shared accounting duties for the band, but in 2009 Hutz took sole charge and upped his salary to $130,000 (£81,250) while Kaplan was paid just $57,000 (£36,625).
The legal documents state, "Hutz brazenly absconded with approximately half a million dollars from the bank accounts of the Gogol Bordello entities and deposited those funds into the accounts of new companies which are wholly owned by Hutz."
Kaplan also claims he is owed money from royalties after he improved the "musicianship and finances of the band".