CaaStle founder Christine Hunsicker charged with – Business News
A outstanding entrepreneur who based the now-bankrupt clothes technology startup CaaStle was criminally charged on Friday with defrauding traders out of more than $300 million, the Justice Department stated.
Authorities stated Christine Hunsicker, 48, of Lafayette, NJ, promoted CaaStle to traders as a more than $1.4 billion “Clothing-as-a-Service” business that helped firms rent attire to shoppers with an option to buy, regardless of figuring out it was financially distressed and short of money.
The alleged fraud spanned six years beginning in 2019, three years after the Princeton University alumna was named one of Inc magazine’s “Most Impressive Women Entrepreneurs” and Crain’s New York Business’ “40 Under 40.”
Christine Hunsicker’s alleged fraud spanned six years beginning in 2019, three years after the Princeton University alumna was named one of Inc magazine’s “Most Impressive Women Entrepreneurs” and Crain’s New York Business’ “40 Under 40.” Bloomberg
Hunsicker was charged in a six-count indictment with wire fraud, securities fraud, money laundering, making false statements to a bank and aggravated identification theft.
She turned herself in to authorities, and will face a long time in jail if convicted. The Securities and Exchange Commission filed a associated civil lawsuit.
In a joint assertion, Hunsicker’s attorneys Michael Levy and Anna Skotko stated the indictment offered “an incomplete and very distorted picture,” regardless of their consumer being “fully cooperative and transparent” with prosecutors.
“There is much more to this story, and we look forward to telling it,” the attorneys added.
Authorities stated Hunsicker falsified CaaStle’s financial statements and bank data to raise capital.
This included alleged representations that CaaStle earned $66.3 million on income of $439.9 million in 2023, when it truly misplaced $81 million on income of $15.7 million.
Hunsicker was charged in a six-count indictment with wire fraud, securities fraud, money laundering, making false statements to a bank and aggravated identification theft. REUTERS
Hunsicker was additionally accused of falsely telling traders their money would go towards shopping for discounted shares from current shareholders who needed liquidity, together with after the 2022 collapse of the FTX cryptocurrency exchange.
In one occasion, Hunsicker allegedly raised more than $20 million after forging a CaaStle director’s signature authorizing the issuance of stock choices to an investor.
Prosecutors stated Hunsicker fraudulently raised more than $275 million for CaaStle and $30 million for a associated enterprise, P180.
CaaStle filed for Chapter 7 chapter liquidation in Delaware on June 20.
“The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria,” US Attorney Jay Clayton in Manhattan stated in a assertion.
