Christine Hunsicker, former chief executive officer of fashion rental pioneer CaaStle, was released on a $1 million bond on Friday after a $300 million federal fraud indictment was unsealed.
Hunsicker, 48, secured the bond with property and agreed to surrender her passport and restrict her travel while avoiding all contact with current and former employees or investors in CaaStle and P180, a side business she helped Brendan Hoffman set up. She will also submit to drug testing and mental health evaluation.
Anna Margaret Skotko, an attorney at Skotko Law who is representing Hunsicker, did not respond to a request for comment Monday.
The indictment has been expected since CaaStle started to dissolve in late March, when the company’s board told investors that Hunsicker had exited and that its rental business was nowhere near as large as had been presented. As of 2023, CaaStle had raised $521 million and racked up losses of $511 million, but still had a business with only $16 million in annual sales to show for it.
The U.S. Attorney’s office charged Hunsicker with wire fraud, securities fraud and money laundering and claimed she gave doctored audit reports to would-be investors to raise money from investors.
Hunsicker, who surrendered to authorities earlier on Friday, faces a maximum of 20 years in prison for each of the fraud charges and as much as 30 years in prison for making false statements to a financial institution.
Fashion knew Hunsicker as a rental booster who claimed she could delicately balance inventory in fashion businesses — taking slow-moving goods and getting more margin out of them by renting them out.
Now, she’s delicately balancing a raft of lawsuits against her, including the criminal case and two other federal cases, one filed by P180 in May and another one by the Securities and Exchange Commission, also filed on Friday.
With each new suit comes more details about how Hunsicker allegedly built CaaStle into what P180 described as “one of the largest frauds in history and will live in infamy alongside the likes of Theranos, [Bernie] Madoff and Enron.” P180 went on to buy control of Vince Holdings Corp. with the belief that the business could tap into CaaStle’s rental power.
The SEC’s complaint said Hunsicker — the only member of the management team on the company’s three-person board — created an alternative set of financials with “false monthly, quarterly and annual results” and presented them to investors upon request.
“By 2022, as CaaStle appeared to be close to reaching profitability, investors increasingly began to ask for audited financial statements,” the SEC suit alleged. “To maintain her ruse, Hunsicker took CaaStle’s final signed audit report for fiscal year ended September 30, 2021, downloaded it to her computer, altered the numbers, removed the going concern statement in the audit opinion letter, and provided the falsified audit to investors.”
CaaStle filed for Chapter 7 bankruptcy last month and expected to be liquidated.