Christine Hunsicker, the founder of a now-bankrupt clothing technology startup CaaStle pleaded guilty on Wednesday in connection to her scheme to defraud investors out of more than $300 million.
Hunsicker pleaded guilty to one count of securities fraud and agreed to forfeit nearly $300 million before U.S. District Judge Paul Oetken in Manhattan. She will be sentenced on August 5, and faces up to 20 years in prison.
The defendant was charged with six criminal counts last July, one month after CaaStle filed for Chapter 7 bankruptcy liquidation.
Investigators said Hunsicker touted CaaStle as a rapidly growing, more than $1.4 billion “Clothing-as-a-Service” business that could help companies rent apparel to consumers with an option to buy, despite knowing it was financially distressed and short of cash.
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The alleged bogus financials included a representation 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.
In one instance, Hunsicker allegedly raised more than $20 million after forging a CaaStle director’s signature authorizing the issuance of stock options to an investor.
Prosecutors said Hunsicker fraudulently raised more than $275 million for CaaStle and $30 million for a related venture, P180.
Hunsicker’s lawyers Michael Levy and Anna Skotko said in a joint statement 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.
According to the prosecutors, the six-year fraud began in 2019, three years after Hunsicker was named one of Inc. magazine’s “Most Impressive Women Entrepreneurs” and Crain’s New York Business’ “40 Under 40.”
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“Christine Hunsicker fashioned a massive fraud scheme, built on forged documents, fabricated audits and material misrepresentations to hundreds of venture capital investors,” U.S. Attorney Jay Clayton said in a statement. “Individuals who exploit investor trust for personal gain will be held accountable.”
Another recent high profile fraud case came to light last month, when Gökçe Güven, a 26-year-old Turkish national and the founder and CEO of fintech startup Kalder, was charged last week with alleged securities fraud, wire fraud, visa fraud, and aggravated identity theft. Güven was featured in the Forbes 30 under 30 list for 2025.
The U.S. Department of Justice alleges that, during Kalder’s seed round in April of 2024, Güven managed to raise $7 million from more than a dozen investors after presenting a pitch deck filled with false information.