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The founder of fashion-rental and technology company CaaStle Inc. pleaded guilty to vastly inflating revenue figures to defraud investors who poured more than $300 million into her company.
Christine Hunsicker pleaded guilty to a single charge of securities fraud in Manhattan federal court Wednesday, admitting she falsified financial statements to promote CaaStle as a valuable, growing business when in reality it was struggling.
“Beginning in February 2019, I knowingly provided false statements about CaaStle’s finances to current and future investors,” Hunsicker told US District Judge J. Paul Oetken. She faces as long as 15 2/3 years in prison under federal guidelines when she’s sentenced on Aug. 5.
Hunsicker, 48, launched a clothing-rental business called Gwynnie Bee in 2011 but reinvented it into an enterprise software firm for the fashion industry in 2018. As CaaStle, the company attracted big-name investors and prominent board members, eventually claiming a valuation of $1.4 billion.
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But federal prosecutors and the US Securities and Exchange Commission said Hunsicker lied to investors for over six years, from 2019 to March 2025, making up revenue numbers that made CaaStle look like a roaring success though it was actually in “significant financial distress.”
In an income statement for the first two quarters of 2023, CaaStle reported an operating profit of almost $24 million, when the true figure was less than $30,000, according to the government. Later that year, Hunsicker sent a screenshot to an investor showing the company had $50 million of cash in the bank, prosecutors said. The true number was less than $1 million.
The case is US v. Hunsicker, 25-cr-00318, US District Court, Southern District of New York (Manhattan).
By Bob Van Voris
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