CaaStle Founder Christine Hunsicker Arrested on Fraud Charges

New York, NY — Christine Hunsicker, the founder of clothing-rental company CaaStle, surrendered to authorities on Friday and was arrested on federal fraud charges. Prosecutors accuse Hunsicker of cheating investors out of $300 million.

Federal prosecutors in the Southern District of New York allege that Hunsicker misrepresented CaaStle’s financial performance to investors. This includes making false revenue projections and falsely claiming to have substantial cash reserves, even as the company was facing financial collapse.

U.S. Attorney Jay Clayton stated, “Christine Hunsicker defrauded investors of hundreds of millions of dollars through document forgery, fabricated audits and material misrepresentations about her company’s financial health.”

The indictment further claims that Hunsicker continued her fraudulent activities and sought new investments even after being removed as chair by CaaStle’s board, which prohibited her from soliciting funds.

Hunsicker, 48, resigned in April amid accusations of impropriety, leading to civil lawsuits against her and the company for fraud. CaaStle, formerly known as Gwinnie Bee, filed for Chapter 7 bankruptcy in June.

She turned herself in to authorities on Friday morning and was expected to appear in federal court in the afternoon. Hunsicker faces multiple charges, including one count of wire fraud, two counts of securities fraud, and one count of money laundering. Each fraud charge carries a maximum sentence of 20 years in prison.

Hunsicker’s attorneys, Michael Levy and Anna Skotko, released a statement asserting that their client had been fully cooperative with investigators. They said the indictment presents “an incomplete and very distorted picture” and expressed their desire to share more about the situation.

The indictment alleges that Hunsicker falsified financial statements to raise capital. For example, she reportedly claimed CaaStle had earned $66.3 million on revenue of $439.9 million in 2023, while the company actually lost $81 million on just $15.7 million in revenue.

According to prosecutors, Hunsicker illegally raised over $275 million for CaaStle and an additional $30 million for a related venture, P180. The Securities and Exchange Commission has also filed a related civil lawsuit against her.

Hunsicker’s charges represent a significant development in the case against a founder who once boasted of partnerships with major brands like Ralph Lauren and Ann Taylor. The U.S. Attorney’s office cautioned that the promise of pre-IPO technology companies can attract fraudsters prey on investor enthusiasm.