Startup founder Christine Hunsicker accused of defrauding investors out of $300M
Christine Hunsicker, the founder of clothing tech company CaaStle, has been charged with wire fraud, securities fraud, money laundering, making false statements to a financial institution and aggravated identity theft, according to a press release from the U.S. Attorney's Office for the Southern District of New York.
The founder allegedly falsely promoted CaaStle as a growing business valued at more than $1.4 billion in order to secure more funding from investors. In reality, the company "was in financial distress with limited cash and significant expenses," according to the indictment.
Hunsicker's attorneys, Michael Levy and Anna Skotko, said in a statement that Hunsicker has "been fully cooperative and transparent" with authorities, but they "nonetheless have chosen to present to the public an incomplete and very distorted picture."
"There is much more to this story, and we look forward to telling it," the statement said.
Startup founder gave fake documents to investors, officials say
According to the indictment, Hunsicker falsified documents and lied to investors about the financial state of the company beginning in 2019.
These allegedly documents included "falsely inflated income statements, fake audited financial statements, fictitious bank account records, and sham corporate records."
On one occasion, according to the indictment, an audit firm confronted Hunsicker about a fake review she provided to an investor. She said she created the audit for a lecture at Princeton University and mistakenly sent it to the investor. But the lecture didn't exist, authorities say.
After surrendering on July 18, Hunsicker pleaded not guilty and was released on $1 million bond, court records show.
What is CaaStle? Fashion startup files for bankruptcy amid founder's arrest
CaaStle promotes itself as "a catalyst for brands and retailers to propel digital growth and profitability across their business," according to its website.
"We help creators launch their own clothing rental services," its Instagram account says.
Hunsicker resigned from CaaStle and another company she owned, P180, in March after CaaStle's board of directors told its investors that she had falsified documents, per the indictment against her. It also said CaaStle filed for Chapter 7 bankruptcy in June.
Attorney warns investors about fraud
Jay Clayton, U.S. attorney for the Southern District of New York, warned investors in a statement to "be aware" about potential fraud schemes tied to businesses that haven't issued an initial public offering.
"The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria," Clayton said. "Investors should be aware of these incentives and that pre-IPO companies are not subject to the rigors of SEC registration."
More: Want to invest in an IPO? Here's what you need to know to profit on initial public offerings
Melina Khan is a national trending reporter for USA TODAY. She can be reached at melina.khan@usatoday.com.
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CDCR said the Board of Parole Hearings coordinated with ICE after Phan was granted parole in 2022. Phan was released that year to ICE custody. But those details did not stop Trump officials from taking credit for his arrest and blaming California leaders for letting Phan loose. 'It is sickening that Governor Newsom and Mayor Bass continue to protect violent criminal illegal aliens at the expense of the safety of American citizens and communities,' DHS Assistant Secretary Tricia McLaughlin said in a statement. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
