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The founder of a Southlake-based supply-chain management startup has been indicted on charges of defrauding investors out of at least $25 million, according to the U.S. Attorney’s Office for the Northern District of Texas.
Christopher Kirchner, the 35-year-old founder of Slync, was indicted Thursday on five counts of wire fraud and eight counts of money laundering. Federal authorities said Kirchner “swindled investors out of millions of dollars he used to fund a splashy lifestyle.”
“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,” said U.S. Attorney Leigha Simonton in a statement. “Investors deserved honesty; instead they got chicanery.”
According to government prosecutors, Kirchner diverted at least $25 million of investor money for his personal use while serving as Slync’s CEO from 2017 to 2022, when he was fired by the company’s board of directors following allegations of misconduct.
Federal authorities said Kirchner attempted to cover his tracks by scamming more investors and firing employees who questioned him.
Authorities say some of the money was transferred from the company’s Silicon Valley Bank account into a Chase Bank company account that only he could access and then into Kirchner’s personal account. Around $20 million was transferred directly from the Silicon Valley account into his personal account. That money was allegedly used to fund a lifestyle federal prosecutors are calling lavish and splashy.
Kirchner bought a private jet with $16 million of those funds and also used company money to get a luxury suite at a “Dallas-area professional sports team” stadium, according to government prosecutors.
Slync raised around $57 million in two funding rounds. All of those funds were wired into Slync’s Silicon Valley Bank account and were to be used for developing products and covering other general company expenses. According to the Justice Department, Slync was “drained of funds” and struggled to make payroll in spring of 2022.
When that happened, Kirchner tried to replace some of the money he’d misappropriated by convincing at least four investors to wire around $850,000 to Slync, calling it a third funding round, according to prosecutors. The company’s board of directors never approved that investment round.
While waiting for that money, Kirchner tried to excuse the payroll issues by first claiming the company’s cash was invested in assets that were difficult to divest then later told the company’s leaders that the federal government froze the company’s accounts because of transactions he had with sanctioned entities in Russia, prosecutors said.
In June 2022, Kirchner fired two Slync employees who “expressed concern about his management,” prosecutors said. One of the employees reported that Kirchner falsely exaggerated Slync’s financial performance when talking with investors.
The next month, after Kirchner was suspended as CEO, he removed certain IT administrator privileges from key employees thereby preventing them to access Slync’s computer systems and tried to delete about 18 gigabytes of company data including emails, the government said.
If convicted of all charges, Kirchner faces up to 20 years in prison per count of wire fraud and 10 years per count of money laundering.