Former Slync CEO Chris Kirchner has been indicted on federal charges that he defrauded investors out of at least $25 million from the FreightTech startup he helped launch in 2017. Authorities allege he used the money to fund a lavish lifestyle.
A grand jury on Tuesday indicted Kirchner, 35, of Westlake, Texas, on five counts of wire fraud and eight counts of money laundering in the U.S. District Court for the Northern District of Texas.
“Rather than focus on growing his fledgling business, Christopher Kirchner allegedly swindled investors out of millions of dollars he used to fund a splashy lifestyle — then allegedly attempted to cover his tracks by conning even more investors and by firing employees who dared question him,” U.S. Attorney Leigha Simonton said in a news release.
Kirchner, who co-founded Slync, a logistics visibility platform that works with shippers, 3PLs and carriers, was CEO from 2017 until his firing last August.
In February, the Securities and Exchange Commission and the U.S. Department of Justice filed criminal complaints against Kirchner, who was arrested and charged after FBI agents raided his Texas home.
While the DOJ release states Kirchner raised “roughly $50 million in [Slync’s] Series B investment round,” the SEC and PitchBook, an online tool for analysts, private equity and venture capital investors, claim he raised around $60 million in the Series B investment deal led by venture firms Goldman Sachs Growth, ACME Ventures, 235 Capital Partners, Correlation Ventures and other existing investors in February 2021. The reason for the discrepancy wasn’t immediately clear.
Soon after the company completed the fund raise in 2021, court filings allege Kirchner used some of the money to buy a 2010 Gulfstream G550 jet for an estimated $16 million to fly to celebrity golf tournaments and attempted to buy an English soccer team instead of paying Slync’s employees. In January, the jet was sold for an undisclosed amount.
“Between April 2020 and March 2022, Mr. Kirchner allegedly initiated nearly 100 wire transfers moving money from Slync’s Silicon Valley Bank account into the company’s account at JPMorgan Chase Bank — an account only he had access to,” according to the indictment. “He then allegedly wired much of the money from the Chase account to his personal bank accounts. In addition, Mr. Kirchner allegedly wired $20 million directly from Slync’s Silicon Valley Bank account into his personal checking account.”
He also used some of those funds to “secure a luxury suite at the stadium of a Dallas-area professional sports team,” according to the indictment.
In August 2022, Slync fired Kirchner and removed him as chairman of its board of directors after the company and Kirchner had come under fire for failing to pay its employees for months.
After being suspended from his CEO responsibilities in late July, a source at the company told FreightWaves that Kirchner allegedly retaliated, locking out several executives from accessing Google Workspace, previously Google Suite, and other communication channels the company utilized.
The indictment claims he also “attempted to delete approximately 18 gigabytes of Slync data, including emails.”
Fresh start for Slync.io?
Greg Kefer, chief marketing officer of Slync, confirmed Thursday that the company knows about Kirchner’s indictment.
“We are aware of the ongoing federal criminal case involving former Slync CEO, Christopher Kirchner, and continue to cooperate with the prosecutors,” Kefer said in a statement to FreightWaves. “As victims of Mr. Kirchner’s actions, we are looking forward to the day when justice is served.
“In the meantime, the company has moved on. We have bolstered the Slync leadership team, our investors have doubled down with $24 million in new funding, we are growing our customer base and we are focused on building a great company.”
In February, Slync secured $24 million in fresh funding, led by Goldman Sachs with participation from Blumberg Capital, ACME Ventures and Gaingels. The company tapped industry veteran John Urban, who served as a strategic adviser to Slync for nearly four years, to lead the embattled supply chain platform in October 2022.
Kirchner’s arraignment is scheduled for May 17 before U.S. Magistrate Judge Hal R. Ray Jr.
If convicted, Kirchner faces up to 20 years in prison for each wire fraud charge and up to 10 years for each count of money laundering, according to the DOJ release.
Do you have a news tip to share? Send me an email or message me @cage_writer on Twitter. Your name will not be used without your permission.
Read related articles:
Feds charge former Slync CEO in $67 million fraud scheme
Slync.io fires CEO Chris Kirchner, strips board chairmanship
Slync.io’s promise to pay employees falls flat after 2 months without wages
Future of Supply Chain
JUNE 21-22, 2023 • CLEVELAND, OH • IN-PERSON EVENT
The greatest minds in the transportation, logistics and supply chain industries will share insights, predict future trends and showcase emerging technology the FreightWaves way–with engaging discussions, rapid-fire demos, interactive sponsor kiosks and more.