U.S. authorities are alleging the founder and CEO of fashion technology company CaaStle Inc. defrauded investors by misrepresenting the firm’s finances when raising capital.
In an indictment unsealed Wednesday in a U.S. District Court, Christine Hunsicker — co-founder, CEO and chair of the startup — was charged with one count of wire fraud, two counts of securities fraud and one count each of money laundering, making false statements to a financial institution and aggravated identity theft.
The charges stem from allegations that between February 2019 and March 2025, Hunsicker defrauded investors of more than US$275 million by fabricating financial statements and audit materials to mislead them about the company’s financial condition. Authorities allege she also used false financial information about CaaStle to raise another US$30 million for a separate business venture.
In a parallel civil proceeding, the U.S. Securities and Exchange Commission (SEC) filed charges seeking injunctive relief, a director and officer ban, disgorgement and a civil penalty.
In its complaint, the SEC alleged Hunsicker misled investors by concealing share dilution. Investors were told they were buying existing shares from early shareholders when in fact they were sold newly issued shares. The SEC alleged she created and distributed false capitalization tables to hide the dilution.
“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. The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria. Investors should be aware of these incentives and that pre-IPO companies are not subject to the rigors of SEC registration,” said Jay Clayton, U.S. attorney for the Southern District of New York.
None of the allegations have been proven, and Hunsicker is presumed innocent of the criminal charges.