Fashion Tech CEO Christine Hunsicker Arrested In Alleged $300 Million Fraud Scheme, Accused Of Misleading Investors And Faking Financials
Christine Hunsicker is the face behind the fashion rental company CaaStle, which stands for Clothing as a Service. Since her business revolves around a subscription model and lets people rent clothes instead of buying them, it was seen as a game-changer in the retail industry for the innovative idea behind it. While Hunsicker is a well-known name when it comes to the fashion-tech world, she is under hot waters recently and facing multiple charges for lying to investors and using false information to raise more than $300 million.
CaaStle founder Christine Hunsicker has been accused of misleading investors in a fashion-tech fraud scandal
Christine Hunsicker gained massive popularity for her clothing rental startup CaaStle, but who knew what was going on behind the scenes, as she was arrested this Friday over charges of fraud with its investors and securing over $300 million in funding based on deception and lies. While the company was on the verge of shutting down and failing miserably, Hunsicker painted a different picture to the investors and bragged about how well the company had been doing. Claims were also made regarding the revenue generated by the company and the cash reserves CaaStle held, when the reality was completely different.
The U.S. Attorney Jay Clayton said in an announcement on Friday about the fraud on multiple fronts and the lies involved about the company’s financial standing. Clayton stated:
Christine Hunsicker defrauded investors of hundreds of millions of dollars through document forgery, fabricated audits and material misrepresentations about her company’s financial health.
According to the charges pressed against her, the false information presented did not stop even when CaaStle’s board removed Hunsicker as the chair, and she was told she could not seek any more investments. She still attempted to raise money, despite the efforts put in to avoid going down this lane. Hunsicker’s lawyers seem to be pushing against the claims made against her and letting on their side of the story in a statement. As per the statement:
Although Ms. Hunsicker has been fully cooperative and transparent with both the U.S. Attorney for the Southern District of NY and the SEC, they nonetheless have chosen to present to the public an incomplete and very distorted picture in today’s indictment. There is much more to this story, and we look forward to telling it.
While Christine Hunsicker stepped down from her role in April after accusations were placed on her by CaaStle’s board of being involved in misconduct and fraudulent actions, it was, however, that Hunsicker turned herself in on Friday. She subsequently appeared in Manhattan’s federal court, where she pleaded not guilty on the multiple charges put up against her. If convicted, Hunsicker could potentially face years in prison because of the several counts against her.
