Former CEO Hunsicker Charged With $300 Million Fraud Scheme

Christine Hunsicker, a former chief executive of two clothing technology companies, was released on $1 million bail after pleading not guilty to charges alleging she cheated investors out of over $300 million over the past six years. Hunsicker, 48, of New Jersey, faces six counts, including fraud, aggravated identity theft, and false statement charges in the indictment filed in Manhattan federal court.

U.S. Attorney Jay Clayton stated that Hunsicker forged documents, fabricated audits, and made material misrepresentations about her company’s financial condition to defraud investors in CaaStle Inc. and P180. The indictment alleges that Hunsicker portrayed CaaStle as a high-growth, private company with substantial cash on hand, despite knowing it faced significant financial distress.

Defense lawyers Michael Levy and Anna Skotko argued that prosecutors have presented an incomplete and distorted picture in the indictment, despite Hunsicker’s efforts to be fully cooperative and transparent with prosecutors and the Securities and Exchange Commission. They stated that there is more to the story and look forward to telling it.

Hunsicker did not comment as she left the courthouse with Skotko after entering the not-guilty plea and agreeing to the rules of her $1 million bail, which included not having any contact with former or current investors or employees. The indictment reveals that Hunsicker continued her fraudulent scheme even after the CaaStle board of directors removed her and prohibited her from soliciting investments or taking other actions on the company’s behalf. She persisted in her scheme even after law enforcement agents confronted her over the fraud.

Before the fraud allegations emerged, Hunsicker was recognized as a rising star in the fashion world. She was named to the “40 under 40” lists, selected as one of the “Most Impressive Women Entrepreneurs,” and recognized by the National Retail Federation as someone shaping the future of retail. At a time when the business was in financial distress with limited cash available and significant expenses, CaaStle was valued by Hunsicker at $1.4 billion.

Hunsicker was allegedly lying to investors from February 2019 through March 2024. Prosecutors allege that she fed investors falsely inflated income statements, fake audited financial statements, fictitious bank account records, and sham corporate records. She allegedly told one investor in August 2023 that CaaStle reported an operating profit of nearly $24 million in the second quarter of 2023 when its operating profit that quarter was actually less than $30,000.

The indictment alleges that Hunsicker carried out the majority of the fraud by bilking CaaStle investors of $275 million before forming P180 last year to infuse CaaStle with cash before its investors could discover her fraud. Through misrepresentations and omissions, she cheated P180 investors out of about $30 million. CaaStle filed for Chapter 7 bankruptcy last month, leaving hundreds of investors holding now-worthless CaaStle shares. Hunsicker was forced to resign from CaaStle’s board in December and formally resigned as chief executive in March.

In a related civil filing, the SEC stated that Hunsicker’s “fake financials” supported her narrative that CaaStle was nearing an initial public offering or sale in late 2022 as it enjoyed rapid and steady revenue growth after launching a new monetization model called “Clothing-as-a-Service.” In reality, CaaStle’s revenues were shrinking, its losses were increasing, and the company was never profitable. Not a single existing or prospective CaaStle investor received accurate monthly, quarterly, or annual CaaStle financial statements from Hunsicker.