Clothing Tech Entrepreneur Charged With $300 Million Fraud In US (cnbc.com) 17
Christine Hunsicker, founder of the failed "Clothing-as-a-Service" startup CaaStle, has been criminally charged with defrauding investors of over $300 million by falsifying financials and misrepresenting the company's health. CNBC reports: Authorities said Christine Hunsicker, 48, of Lafayette, New Jersey, promoted CaaStle to investors as a more than $1.4 billion "Clothing-as-a-Service" business that helped companies rent apparel to consumers with an option to buy, despite knowing it was financially distressed and short of cash. The alleged fraud spanned six years starting in 2019, three years after the Princeton University alumna was named one of Inc magazine's "Most Impressive Women Entrepreneurs" and Crain's New York Business' "40 Under 40."
Hunsicker was charged in a six-count indictment with wire fraud, securities fraud, money laundering, making false statements to a bank and aggravated identity theft. She turned herself in to authorities, and could face decades in prison if convicted. The Securities and Exchange Commission filed a related civil lawsuit. In a joint statement, Hunsicker's lawyers Michael Levy and Anna Skotko said the indictment presented "an incomplete and very distorted picture," despite their client being "fully cooperative and transparent" with prosecutors. "There is much more to this story, and we look forward to telling it," the lawyers added.
Authorities said Hunsicker falsified CaaStle's financial statements and bank records to raise capital. This included alleged representations that CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually lost $81 million on revenue of $15.7 million. Hunsicker was also accused of falsely telling investors their money would go toward buying discounted shares from existing shareholders who needed liquidity, including after the 2022 collapse of the FTX cryptocurrency exchange. Prosecutors said Hunsicker fraudulently raised more than $275 million for CaaStle and $30 million for a related venture, P180.
Hunsicker was charged in a six-count indictment with wire fraud, securities fraud, money laundering, making false statements to a bank and aggravated identity theft. She turned herself in to authorities, and could face decades in prison if convicted. The Securities and Exchange Commission filed a related civil lawsuit. In a joint statement, Hunsicker's lawyers Michael Levy and Anna Skotko said the indictment presented "an incomplete and very distorted picture," despite their client being "fully cooperative and transparent" with prosecutors. "There is much more to this story, and we look forward to telling it," the lawyers added.
Authorities said Hunsicker falsified CaaStle's financial statements and bank records to raise capital. This included alleged representations that CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually lost $81 million on revenue of $15.7 million. Hunsicker was also accused of falsely telling investors their money would go toward buying discounted shares from existing shareholders who needed liquidity, including after the 2022 collapse of the FTX cryptocurrency exchange. Prosecutors said Hunsicker fraudulently raised more than $275 million for CaaStle and $30 million for a related venture, P180.
"Clothing-as-a-Service" (Score:5, Funny)
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Here it is as a competitor that hasn't been indicted (yet): https://www.renttherunway.com/ [renttherunway.com]
It looks like a sort of "next step" after businesses like Plato's Closet where they buy and sell gently used women's clothing. One of my son's gf's was a customer of Plato's Closet. There are a fair number of women who buy clothing, then wear it once or not at all, then move on to something new. So rather than have the entire house full of clothing, they buy back and forth.
So I can kind of understand this online business model. I don't think it will work, but I understand it.
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worse... someone... multiple someones believed that they had $439.9 million in revenue!!! from Clothing as a fucken service... we have fallen so far off the path as a species... we're doomed
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I'm not sure who is dumber.
People who wear "clothing tech" or people who invest in it.
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Would you like "kill-me-now-as-a-service"?
For a small monthly fee we can offer a range of personal trespassing solutions individually tailored to your needs. The basic package kills you (and only you) on Mondays and Thursdays during business hours, national holidays excepted. If you would like the premium lifetime offer, you will be killed 5 days per week (1) and your preferred undertaker will be kept on speed dial (2). Sign up now during the promotion period and if you're not happily chopped up into littl
The American Dream (Score:2)
Convince rich people to let you join their club, and when that doesn't work, just scam them.
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Only problem with that is they REALLY don't like it when you fuck with their money. If she had just stuck with robbing her customers, it all would have been fine.
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Parks and Rec (Score:2)
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Convince rich people to let you join their club, and when that doesn't work, just scam them.
The bibles here all have an extra verse in the Sermon of the Mount: "Blessed be those who faked it til they made it".
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You are supposed to cut and run when you can't get VC any more money with just deniable dishonesty.
Getting away with outright fraud for hundreds of millions is much harder and requires more intelligence ... beyond her capabilities it seems.
New Jersey (Score:2)
That says it all... The scamming state.
Inspiring a generation (Score:2)