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Christine Hunsicker, the founder of the now-bankrupt clothing technology startup CaaStle, has been charged for defrauding investors out of more than $300 million, according to the Justice Department. Authorities allege that 48-year-old Hunsicker promoted CaaStle as a thriving "$1.4 billion Clothing-as-a-Service" enterprise, despite knowing the company was in severe financial distress. CaaStle, which helped companies rent apparel to consumers with an option to buy, filed for
Chapter 7 bankruptcy liquidation
in Delaware on June 20.The alleged fraud, spanning six years from 2019, occurred after Hunsicker, a Princeton University alumna, had been recognized by Inc magazine as one of its "Most Impressive Women Entrepreneurs" and by Crain’s New York Business in its "40 Under 40" list.
What are the charges against Christine Hunsicker
Hunsicker faces a six-count indictment, including charges of wire fraud, securities fraud, money laundering, making false statements to a bank, and aggravated identity theft. She has turned herself in to authorities and could face decades in prison if convicted. The Securities and Exchange Commission has also filed a related civil lawsuit.
Authorities contend that Hunsicker falsified CaaStle’s financial statements and bank records to secure capital. For instance, she allegedly claimed CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually suffered an $81 million loss on just $15.7 million in revenue.Hunsicker is also accused of falsely informing investors their funds would be used to purchase discounted shares from existing shareholders needing liquidity, even after the 2022 collapse of the FTX cryptocurrency exchange. In one instance, prosecutors allege Hunsicker raised over $20 million by forging a CaaStle director’s signature to authorize the issuance of stock options to an investor.Prosecutors stated that Hunsicker fraudulently raised more than $275 million for CaaStle and an additional $30 million for a related venture, P180.U.S. Attorney Jay Clayton in Manhattan commented on the case, stating, “The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria.”
What Christine Hunsicker's lawyers say
In a joint statement, Hunsicker’s lawyers, Michael Levy and Anna Skotko, asserted that the indictment presents "an incomplete and very distorted picture," despite their client's full cooperation and transparency with prosecutors. "There is much more to this story, and we look forward to telling it," they added.