A Texas executive was charged with defrauding investors and using some of the proceeds for his own personal benefit, Insurance News Net reports.
35-year-old Christopher Kirchner of Westlake was the co-founder and CEO of Slync Inc., a supply-chain management software startup. He was arrested at his home last week and charged with wire fraud. Kirchner was also charged in a separate complaint by the Securities and Exchange Commission with violating the antifraud provisions of the federal securities laws.
Authorities say Kirchner fraudulently offered and sold over $67 million of securities in Slync from 2020 through 2022 and misrepresented its financial condition to investors. He also allegedly wired tens of millions of dollars from the firm’s bank account to his personal checking account until his termination in August 2022. According to prosecutors, Kirchner claimed that a $20 million transfer into his personal account represented a distribution from his company when in fact, Slync’s board of directors had not authorized any such distribution.
The SEC alleged that Kirchner misappropriated the money to fund his personal investment entity, KFIM LLC, pay entertainment expenses, and purchase a $16 million personal private jet, all while failing to make timely payroll distributions to Slync employees on several occasions.
“We allege that Kirchner lied about Slync’s business to secure tens of millions of dollars from investors, a massive portion of which he then stole from the company to live extravagantly while not paying Slync’s employees,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office.
“This defendant flaunted his apparent wealth while allegedly diverting millions from company coffers into his private bank account,” U.S. Attorney Leigha Simonton said. “Slync investors and employees are understandably outraged, and we sympathize.”
If convicted, Kirchner faces up o 20 years in federal prison. The SEC is seeking permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and an officer and director bar against Kirchner. A Slync executive said the firm is cooperating with the investigation of the case.
Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. We bring a unique level of knowledge and experience when representing the rights of investors, including resolving cases through arbitration and litigation when necessary. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a no-cost evaluation of your matter