Latest news with #CaaStle
Yahoo
7 hours ago
- Business
- Yahoo
The surprising details of fashion entrepreneur Christine Hunsicker's fraud indictment
Clothing tech entrepreneur and CaaStle founder Christine Hunsicker is out on $1 million bail after she was charged on six counts of cheating customers out of more than $300 million over the past six years in a complex fraud scheme that inlcuded wire fraud, securities fraud, money laundering, making false statements to a financial institution, and aggravated identity theft. Southwest Airlines' open seating is ending: Here's what the new 8-group boarding process will look like Here's exactly how much you'll save on your 2026 taxes, by income bracket: Trump's One Big Beautiful Bill benefits Why Third Amendment memes are suddenly taking over social media Hunsicker pleaded not guilty in a Manhattan federal court on Friday, after she turned herself in to authorities, and could face decades in prison if convicted, according to CNBC, who reported that the Securities and Exchange Commission (SEC) filed a related civil lawsuit. Here's what to know about the indictment. Why was Hunsicker indicted? Jay Clayton, the U.S. attorney for the Southern District of New York, who was working with the FBI, announced on Friday that Hunsicker is charged with forging documents, fabricating audits, and making material misrepresentations about her company's financial condition in an alleged scheme to defraud investors in her clothing technology companies CaaStle Inc. and P180. The documents allege she continued to solicit millions of dollars in investments for both companies and 'persisted in her scheme' even after law enforcement agents approached her about the fraud. 'The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria,' Clayton said in a statement. According to the statement, the fashion tech entrepreneur and founder of CaaStle, a 'clothing-as-a-service' business that enabled clothing brands to rent inventory to consumers, promoted the company 'as a rapidly growing business valued at more than $1.4 billion, [although she] knew that CaaStle was in financial distress with limited cash and significant expenses.' To raise the capital for CaaStle's operations, she 'provided investors with falsified income statements, fake audited financial statements, fictitious bank records, and sham corporate documents that grossly overstated CaaStle's operating profit, revenue, and available cash.' Surprising details in Hunsicker's indictment The indictment alleges, among other things, that Hunsicker provided two fabricated audits to investors and conducted internet searches for the terms 'fraud,' 'created an audit firm fake,' and 'JP morgan 4m records faked,' an apparent reference to fraud charges related to JPMorgan Chase's acquisition of the college financial aid startup called Frank, which resulted in the federal prosecution of its founder Charlie Javice. (Javice was convicted in March of defrauding JPMorgan Chase of $175 million by exaggerating her customer base tenfold, according to National Public Radio.) It also accuses Hunsicker of fabricating the existence of CaaStle shareholders, falsely claiming that the shareholders needed money for a 'family health emergency' or due to the FTX cryptocurrency exchange collapse. She allegedly then used investors' money to raise new capital for CaaStle, while concealing that the company needed cash. And to 'maintain the fiction,' she issued fake capitalization tables to the investors in order to demonstrate that they had purchased existing CaaStle shares. According to the documents, Hunsicker's scheme also allegedly involved providing an investor with a fake screenshot of CaaStle's bank accounts showing nearly $200 million in available cash, although the company had less than $200,000 in available cash at the time, in or around September 2024. This post originally appeared at to get the Fast Company newsletter: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
USA Today
19 hours ago
- Business
- USA Today
Startup founder Christine Hunsicker accused of defrauding investors out of $300M
The founder of a fashion tech startup has been indicted for allegedly defrauding investors out of more than $300 million, authorities announced July 18. 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
Time of India
a day ago
- Business
- Time of India
Tech startup founder named among 'Most Impressive Women Entrepreneurs' charged for criminal fraud
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. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Could Be the Best Time to Trade Gold in 5 Years IC Markets Learn More Undo 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. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Fast Company
2 days ago
- Business
- Fast Company
The surprising details of fashion entrepreneur Christine Hunsicker's fraud indictment
Clothing tech entrepreneur and CaaStle founder Christine Hunsicker is out on $1 million bail after she was charged on six counts of cheating customers out of more than $300 million over the past six years in a complex fraud scheme, including wire fraud, securities fraud, money laundering, making false statements to a financial institution, and aggravated identity theft. Hunsicker pleaded not guilty in a Manhattan federal court on Friday, after she turned herself in to authorities, and could face decades in prison if convicted, according to CNBC, who reported that the Securities and Exchange Commission (SEC) filed a related civil lawsuit. Here's what to know about the indictment. Why was Hunsicker indicted? Jay Clayton, the U.S. attorney for the Southern District of New York, who was working with the FBI, announced on Friday that Hunsicker is charged with forging documents, fabricating audits, and making material misrepresentations about her company's financial condition in an alleged scheme to defraud investors in her clothing technology companies CaaStle Inc. and P180. The documents allege she continued to solicit millions of dollars in investments for both companies and 'persisted in her scheme' even after law enforcement agents approached her about the fraud. 'The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria,' Clayton said in a statement. According to the statement, the fashion tech entrepreneur and founder of CaaStle, a 'clothing-as-a-service' business that enabled clothing brands to rent inventory to consumers, promoted the company 'as a rapidly growing business valued at more than $1.4 billion, [although she] knew that CaaStle was in financial distress with limited cash and significant expenses.' To raise the capital for CaaStle's operations, she 'provided investors with falsified income statements, fake audited financial statements, fictitious bank records, and sham corporate documents that grossly overstated CaaStle's operating profit, revenue, and available cash.' Surprising details in Hunsicker's indictment The indictment alleges, among other things, that Hunsicker provided two fabricated audits to investors and conducted internet searches for the terms 'fraud,' 'created an audit firm fake,' and 'JP morgan 4m records faked,' an apparent reference to fraud charges related to JPMorgan Chase's acquisition of her college financial aid startup called Frank, which resulted in the federal prosecution of its founder Charlie Javice. (Javice was convicted in March of defrauding JPMorgan Chase of $175 million by exaggerating her customer base tenfold, according to National Public Radio.) It also accuses Hunsicker of fabricating the existence of CaaStle shareholders, falsely claiming that the shareholders needed money for a 'family health emergency' or due to the FTX cryptocurrency exchange collapse. She allegedly then used investors' money to raise new capital for CaaStle, while concealing that the company needed cash. And to 'maintain the fiction,' she issued fake capitalization tables to the investors in order to demonstrate that they had purchased existing CaaStle shares. According to the documents, Hunsicker's scheme also allegedly involved providing an investor with a fake screenshot of CaaStle's bank accounts showing nearly $200 million in available cash, although the company had less than $200,000 in available cash at the time, in or around September 2024.
CBS News
2 days ago
- Business
- CBS News
Fashion startup founder Christine Hunsicker accused of cheating investors out of over $300 million
A former chief executive of two clothing technology companies was released on $1 million bail Friday after pleading not guilty to charges alleging she cheated investors out of over $300 million over the past six years. Christine Hunsicker, 48, of Lafayette, New Jersey, was charged with six counts, including fraud, aggravated identity theft and false statement charges in the indictment in Manhattan federal court. U.S. Attorney Jay Clayton said in a release that Hunsicker forged documents, fabricated audits and made material misrepresentations about her company's financial condition to defraud investors in CaaStle Inc. and P180. "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," Clayton said in a statement on Friday. "The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria." The indictment said Hunsicker, once portrayed as an on-the-rise fashion entrepreneur, portrayed CaaStle as a high-growth, private company with substantial cash on hand when she knew it faced significant financial distress. In a statement, defense lawyers Michael Levy and Anna Skotko said prosecutors "have chosen to present to the public an incomplete and very distorted picture in today's indictment," despite Hunsicker's efforts to be "fully cooperative and transparent" with prosecutors and the Securities and Exchange Commission. "There is much more to this story, and we look forward to telling it," they said. Hunsicker did not comment as she left the courthouse with Skotko after entering the not-guilty plea and agreeing to the rules of her $1 million bail, which included not having any contact with former or current investors or employees. According to the indictment, Hunsicker continued her fraudulent scheme even after the CaaStle board of directors removed her and prohibited her from soliciting investments or taking other actions on the company's behalf. She "persisted in her scheme" even after law enforcement agents confronted her over the fraud, the indictment said. Before the fraud allegations emerged, Hunsicker seemed to be a rising star in the fashion world after she was named to Crain's New York Business "40 under 40" lists, was selected as one of Inc.'s "Most Impressive Women Entrepreneurs" and was recognized by the National Retail Federation as someone shaping the future of retail, the indictment noted. At a time when the business was in financial distress with limited cash available and significant expenses, CaaStle was valued by Hunsicker at $1.4 billion, the indictment said. Hunsicker was lying to investors in February 2019 and continued to do so through this March, prosecutors alleged. They said she fed investors falsely inflated income statements, fake audited financial statements, fictitious bank account records and sham corporate records. She allegedly told one investor in August 2023 that CaaStle reported an operating profit of nearly $24 million in the second quarter of 2023 when its operating profit that quarter was actually less than $30,000. The indictment alleged that she carried out the majority of the fraud by bilking CaaStle investors of $275 million before forming P180 last year to infuse CaaStle with cash before its investors could discover her fraud. Through misrepresentations and omissions, she cheated P180 investors out of about $30 million, the indictment said. It said CaaStle filed for Chapter 7 bankruptcy last month, leaving hundreds of investors holding now-worthless CaaStle shares. Hunsicker was forced to resign from CaaStle's board in December and formally resigned as chief executive in March. In a related civil filing, the SEC said Hunsicker's "fake financials" supported her narrative that CaaStle was nearing an initial public offering or sale in late 2022 as it enjoyed rapid and steady revenue growth after launching a new monetization model called "Clothing-as-a-Service." "In reality, CaaStle's revenues were shrinking, its losses were increasing, and the company was never profitable," the lawsuit said. "Not a single existing or prospective CaaStle investor received accurate monthly, quarterly, or annual CaaStle financial statements from Hunsicker." Before CaaStle, Hunsicker launched Gwynnie Bee, a subscription service renting everyday clothes to women sizes 10 to 32. "We want it to be a place where managing a rotating wardrobe is actually the way the majority of people interact with clothing," Hunsicker told CBS News in 2016 when discussing the company. Previously, Hunsicker was also the COO and president of Right Media, an online advertising startup that sold to Yahoo! for $850 million, and then became the COO of an online file sharing service that was purchased by Facebook.
