CaaStle Founder Christine Hunsicker Arrested on Federal Fraud Charges

NEW YORK, NY — Christine Hunsicker, the founder of the clothing rental company CaaStle, surrendered to authorities Friday on federal fraud charges. Prosecutors allege that Hunsicker misrepresented CaaStle’s financial health, cheating investors out of $300 million through a series of deceptive practices.

According to the U.S. Attorney for the Southern District of New York, Hunsicker made false revenue projections and misled investors about the company’s cash reserves. U.S. Attorney Jay Clayton described the situation, stating, “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 reveals that Hunsicker continued her alleged fraudulent activities even after the CaaStle board stripped her of her leadership role in April. She is charged with one count of wire fraud, two counts of securities fraud, and one count of money laundering, each carrying a maximum sentence of 20 years in prison. Additionally, she faces charges of making false statements to a financial institution and aggravated identity theft.

Hunsicker, 48, had claimed CaaStle was valued at over $1.4 billion and grossly overstated its financial performance. The company, which filed for Chapter 7 bankruptcy in June, was reportedly facing severe financial distress.

As part of her alleged fraudulent actions, Hunsicker is accused of providing investors with falsified bank account statements indicating nearly $200 million in cash, while actual funds were below $200,000. She allegedly engaged in this deception from 2019 onward, despite being confronted about providing false audits.

After she turned herself in Friday morning, Hunsicker was expected to appear in federal court later that day, where she pleaded not guilty to the charges. Her lawyers, Michael Levy and Anna Skotko, claimed that Hunsicker has been fully cooperative, stating, “There is much more to this story, and we look forward to telling it.”

If convicted, Hunsicker could face up to 30 years in prison for making false statements. The Securities and Exchange Commission (SEC) has also filed a related civil lawsuit against her.