A former chief government of two clothes expertise corporations was launched on $1 million bail Friday after pleading not responsible to costs alleging she cheated buyers of over $300 million over the previous six years.
Christine Hunsicker, 48, of Lafayette, New Jersey, was charged with six counts, together with fraud, aggravated identification theft and false assertion costs within the indictment in Manhattan federal court docket.
U.S. Lawyer Jay Clayton stated in a launch that Hunsicker cast paperwork, fabricated audits and made materials misrepresentations about her firm’s monetary situation to defraud buyers in CaaStle Inc. and P180.
The indictment stated Hunsicker, as soon as portrayed as an on-the-rise style entrepreneur, portrayed CaaStle as a high-growth, personal firm with substantial money readily available when she knew it confronted vital monetary misery.
In a press release, protection legal professionals Michael Levy and Anna Skotko stated prosecutors “have chosen to current to the general public an incomplete and really distorted image in immediately’s indictment,” regardless of Hunsicker’s efforts to be “absolutely cooperative and clear” with prosecutors and the Securities and Alternate Fee.
“There may be far more to this story, and we stay up for telling it,” they stated.
Hunsicker didn’t remark as she left the courthouse with Skotko after coming into the not-guilty plea and agreeing to the foundations of her $1 million bail, which included not having any contact with former or present buyers or staff.
Based on the indictment, Hunsicker continued her fraudulent scheme even after the CaaStle board of administrators eliminated her and prohibited her from soliciting investments or taking different actions on the corporate’s behalf.
She “endured in her scheme” even after legislation enforcement brokers confronted her over the fraud, the indictment stated.
Earlier than the fraud allegations emerged, Hunsicker appeared to be a rising star within the style world after she was named to Crain’s New York Enterprise “40 underneath 40” lists, was chosen as considered one of Inc.’s “Most Spectacular Ladies Entrepreneurs” and was acknowledged by the Nationwide Retail Federation as somebody shaping the way forward for retail, the indictment famous.
At a time when the enterprise was in monetary misery with restricted money accessible and vital bills, CaaStle was valued by Hunsicker at $1.4 billion, the indictment stated.
Hunsicker was mendacity to buyers in February 2019 and continued to take action by this March, prosecutors alleged.
They stated she fed buyers falsely inflated earnings statements, faux audited monetary statements, fictitious checking account information and sham company information.
She allegedly instructed one investor in August 2023 that CaaStle reported an working revenue of almost $24 million within the second quarter of 2023 when its working revenue that quarter was truly lower than $30,000.
The indictment alleged that she carried out nearly all of the fraud by bilking CaaStle buyers of $275 million earlier than forming P180 final 12 months to infuse CaaStle with money earlier than its buyers might uncover her fraud.
By means of misrepresentations and omissions, she cheated P180 buyers out of about $30 million, the indictment stated.
It stated CaaStle filed for Chapter 7 chapter final month, leaving a whole lot of buyers holding now-worthless CaaStle shares. Hunsicker was pressured to resign from CaaStle’s board in December and formally resigned as chief government in March.
In a associated civil submitting, the SEC stated Hunsicker’s “faux financials” supported her narrative that CaaStle was nearing an preliminary public providing or sale in late 2022 because it loved fast and regular income progress after launching a brand new monetization mannequin referred to as “Clothes-as-a-Service.”
“In actuality, CaaStle’s revenues have been shrinking, its losses have been growing, and the corporate was by no means worthwhile,” the lawsuit stated. “Not a single current or potential CaaStle investor obtained correct month-to-month, quarterly, or annual CaaStle monetary statements from Hunsicker.”
