Ex-CEO Accused of $300M Investor Fraud Released on Bail
Fashion Tech Executive Faces Six Charges in Manhattan Federal Court
A former CEO of two prominent clothing technology firms has been released on $1 million bail, pleading not guilty to accusations of defrauding investors of over $300 million across six years.
Allegations of Deception Unveiled
Christine Hunsicker, 48, of Lafayette, New Jersey, faces six counts including fraud, aggravated identity theft, and false statement charges. Prosecutors allege she fabricated documents, created fake audits, and made significant misrepresentations about her companies’ financial health.
Fabricated Success Masked Financial Distress
According to the indictment, Hunsicker, once hailed as a rising fashion entrepreneur, presented CaaStle Inc. as a rapidly growing private entity with ample cash reserves. In reality, the company was experiencing severe financial difficulties.
“There is much more to this story, and we look forward to telling it.”
—Michael Levy and Anna Skotko, Defense Lawyers
Hunsicker’s defense attorneys stated that prosecutors have presented a “distorted picture” and emphasized their client’s cooperation with authorities. They expressed anticipation for presenting the full narrative.
Continued Scheme Amidst Removal and Confrontation
The indictment details that Hunsicker allegedly continued her fraudulent activities even after being removed by CaaStle’s board and prohibited from soliciting investments. She reportedly persisted with the scheme even after being confronted by law enforcement.
Fall from Grace: From Rising Star to Fraud Allegations
Before these allegations surfaced, Hunsicker was recognized for her achievements, appearing on Crain’s New York Business “40 under 40” list and being named one of Inc.’s “Most Impressive Women Entrepreneurs.”
At a time when CaaStle faced significant financial strain, Hunsicker valued the company at an astonishing $1.4 billion. Prosecutors claim she lied to investors from February 2019 through March of this year.
Inflated Numbers and Phantom Profits
She allegedly provided investors with falsified income statements, fabricated audited financials, and sham corporate records. In one instance, Hunsicker reportedly told an investor that CaaStle achieved an operating profit of nearly $24 million in the second quarter of 2023, when its actual profit was less than $30,000.
The majority of the alleged fraud, totaling $275 million, was directed at CaaStle investors. Last year, Hunsicker reportedly established P180 to infuse CaaStle with funds before investors discovered the extent of the fraud. Investors in P180 were allegedly defrauded of approximately $30 million.
CaaStle filed for Chapter 7 bankruptcy last month, leaving investors with devalued shares. Hunsicker resigned from CaaStle’s board in December and as chief executive in March.
SEC Details “Fake Financials” in Civil Filing
The Securities and Exchange Commission (SEC) stated in a related civil filing that Hunsicker’s fabricated financial statements supported her narrative of CaaStle nearing an IPO or sale. The SEC noted that CaaStle’s revenues were actually declining, losses were mounting, and the company was never profitable.
The SEC further alleged that “Not a single existing or prospective CaaStle investor received accurate monthly, quarterly, or annual CaaStle financial statements from Hunsicker.” In 2023, venture capital funding in the U.S. tech sector declined by 42% compared to 2022, highlighting the challenging financial landscape for startups (CB Insights 2023 Venture Funding Report).