Fashion-Tech CEO Allegedly Defrauded $300,000,000 From Investors Through Fabricated Documents and False Claims: DOJ

The U.S. Department of Justice (DOJ) is charging a fashion tech CEO for allegedly defrauding investors of hundreds of millions of dollars by lying about its profits.

In a new press release, the DOJ says it’s charging 48-year-old Christine Hunsicker of New Jersey – the CEO and founder of clothing tech firm CaaStle – with numerous crimes after she allegedly forged documents to make it appear as if the firm was financially healthy.

Authorities say that Hunsicker knew that CaaStle was in financial distress “with limited cash and significant expenses.” However, to raise more funds to operate the company, she allegedly fabricated income statements, bank records, and other documents as a means of tricking investors into thinking the firm was profitable and had cash on hand.

According to the DOJ, Hunsicker raked in a staggering $275 million for CaaStle. Some of her alleged fraudulent activities include providing an investor with fake bank account screenshots showing the company had $200 million in cash when in reality it had 1,000x less.

She also allegedly falsified the signature of a board director to make it appear that the firm’s board had authorized the grant of stock options, allowing her to raise another $20 million.

Authorities also allege that Hunsicker defrauded investors of a new business venture, P180, getting them to invest $30 million by using fake information about CaaStle’s success.

All in all, Hunsicker allegedly raised more than $300 from fraudulent practices.

As stated by US Attorney Jay Clayton,

“As alleged, Christine Hunsicker defrauded investors of hundreds of millions of dollars through document forgery, fabricated audits, and material misrepresentations about her company’s financial condition.

The promise of pre-IPO (initial public offering) technology companies can be fertile ground for fraudsters who play on investor euphoria. Investors should be aware of these incentives and that pre-IPO companies are not subject to the rigors of SEC registration.”

Hunsicker is charged with aggravated identity theft, wire fraud, securities fraud, money laundering, and making false statements to a financial institution. If convicted, she faces decades behind bars.