Fashion-tech founder sentenced to prison over $300m fraud scheme

Federal prosecutors in Manhattan announced on Thursday that Christine Hunsicker, 49, founder and former CEO of fashion-tech company CaaStle Inc, has been sentenced to five years in federal prison for her role in a fraud scheme that ran from 2019 to 2025 and involved more than $300m. She also received three years of supervised release.

Hunsicker pleaded guilty in March to one count of securities fraud connected to a scheme that authorities say defrauded hundreds of investors. Her attorneys did not immediately respond to a request for comment.

Falsified records concealed financial distress

According to the US attorney's office for the Southern District of New York, Hunsicker, known as a prominent entrepreneur in the fashion-tech industry, marketed CaaStle as a rapidly growing company valued at more than $1.4bn, despite knowing it was actually in financial distress, with dwindling cash and heavy expenses.

To raise money from investors, she provided a series of fabricated documents, including falsified income statements, fake audited financial statements, fictitious bank records and sham corporate documents that grossly overstated the company's profits and cash reserves. She told investors their money would go toward buying discounted shares from existing shareholders, but prosecutors say those shareholders were entirely invented.

Prosecutors said Hunsicker then funneled the money into the company as new capital while continuing to conceal its true financial condition. They allege she kept engaging in fraudulent conduct even after law enforcement seized her electronic devices in March 2025.

CaaStle collapsed into bankruptcy after revealing in spring 2025 that Hunsicker had massively exaggerated its finances. The company began as an online clothing rental service for plus-size women before expanding to license its platform to other fashion businesses.