A former chief government of two clothes expertise firms was launched on $1 million bail Friday after pleading not responsible to expenses 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 id theft and false assertion expenses within the indictment in Manhattan federal court docket.
U.S. Legal professional Jay Clayton mentioned 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 mentioned Hunsicker, as soon as portrayed as an on-the-rise style entrepreneur, portrayed CaaStle as a high-growth, non-public 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 mentioned prosecutors “have chosen to current to the general public an incomplete and really distorted image in at this time’s indictment,” regardless of Hunsicker’s efforts to be “totally cooperative and clear” with prosecutors and the Securities and Alternate Fee.
“There’s far more to this story, and we sit up for telling it,” they mentioned.
Hunsicker didn’t remark as she left the courthouse with Skotko after coming into the not-guilty plea and agreeing to the principles of her $1 million bail, which included not having any contact with former or present buyers or workers.
In response to 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 mentioned.
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 one in all 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 out there and vital bills, CaaStle was valued by Hunsicker at $1.4 billion, the indictment mentioned.
Hunsicker was mendacity to buyers in February 2019 and continued to take action by means of this March, prosecutors alleged.
They mentioned she fed buyers falsely inflated revenue statements, pretend audited monetary statements, fictitious checking account data and sham company data.
She allegedly informed 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 the vast majority of the fraud by bilking CaaStle buyers of $275 million earlier than forming P180 final yr to infuse CaaStle with money earlier than its buyers may uncover her fraud.
By misrepresentations and omissions, she cheated P180 buyers out of about $30 million, the indictment mentioned.
It mentioned CaaStle filed for Chapter 7 chapter final month, leaving lots of of buyers holding now-worthless CaaStle shares. Hunsicker was compelled to resign from CaaStle’s board in December and formally resigned as chief government in March.
In a associated civil submitting, the SEC mentioned Hunsicker’s “pretend 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 known as “Clothes-as-a-Service.”
“In actuality, CaaStle’s revenues have been shrinking, its losses have been rising, and the corporate was by no means worthwhile,” the lawsuit mentioned. “Not a single present or potential CaaStle investor obtained correct month-to-month, quarterly, or annual CaaStle monetary statements from Hunsicker.”
