Ex-Slync CEO Christopher Kirchner was found guilty Thursday of four counts of wire fraud and seven counts of money laundering following a four-day jury trial in the U.S. District Court for the Northern District in Fort Worth, Texas.
Immediately following the verdict, Kirchner, 36, was taken into custody by the U.S. Marshals Service. U.S. District Court Judge Mark T. Pittman denied a motion to reconsider detention until sentencing, which is scheduled for July 11, by Kirchner’s federal public defender, Jason D. Hawkins.
The jury found that Kirchner, who served as Slync’s CEO from 2017 until he was fired by the FreightTech company’s board of directors in August 2022, defrauded investors out of nearly $25 million for his own personal use.
Before his firing, Kirchner had come under scrutiny after he failed to pay employees for months, used his private jet to fly to celebrity golf tournaments and attempted to buy an English soccer team.
Kirchner faces up to 20 years in federal prison for each count of wire fraud and up to 10 years per count of engaging in monetary transactions in property derived from specified unlawful activity, according to the news release.
Under Kirchner’s leadership, Slync, which was once valued at $240 million, raised nearly $70 million, including the $60 million Series B funding round that closed in February 2021, which was led by venture firm Goldman Sachs Growth, ACME Ventures, 235 Capital Partners, Correlation Ventures and other existing investors.
Soon after the company received the $60 million fund raise in 2021, court filings in a wrongful termination lawsuit by a former company vice president claimed Kirchner bought a 2010 Gulfstream G550 jet for $16 million. It has since been sold.
Former company executives who were fired by Kirchner said they never had access to the company’s accounts and brought their concerns to the board, stating that Kirchner was the only one with access to its investment account, which included the $60 million Series B funds.
Between April 2020 and March 2022, Kirchner initiated nearly 100 wire transfers, moving money from Slync’s Silicon Valley Bank account into the company’s account at J.P. Morgan Chase, an account only he had access to. Prosecutors claimed Kirchner used the funds to buy expensive watches and cars and to secure a luxury suite at the stadium of a Dallas-area professional sports team.
Federal prosecutors alleged Kirchner, who was struggling to make payroll in the spring of 2022, convinced at least four investors to wire Slync around $850,000 as part of a purported Series C investment round, which wasn’t authorized by the company’s board of directors.
While Kirchner, on behalf of Slync, initially blamed an internal administrative error — then later stated its payroll woes stemmed from its inability to liquidate funds in a timely manner — agreed to inject more funding to pay employees. A source confirmed that U.S. and Canadian employees were paid after being owed around $3.8 million.
After learning he was being suspended, Kirchner retaliated by locking some executives out of the company’s communication channels, a source familiar with the situation told FreightWaves.
Kirchner, who had previously ordered the suspensions of nearly a dozen current and former employees for speaking out about the Dallas-based logistics tech startup’s failure to make payroll, was placed on leave in late July 2022. Prosecutors alleged he attempted to delete nearly 18 gigabytes of Slync data, including emails.
Slync was forced to seek an alternative option to a traditional bankruptcy and wind down operations in October after Kirchner filed suit in September 2022 against his former employer for legal fee advancement and indemnification in Delaware’s Court of Chancery.
Kirchner sought to have Slync pay his legal bills in his fraud case after his assets were frozen and Hawkins was assigned to handle his case.
This is a developing story.
Do you have a news tip or story to share? Send me an email or message me @cage_writer on X, formerly known as Twitter. Your name will not be used without your permission.
Read more Slync articles here:
Former Slync CEO indicted on charges of swindling $25M from investors
Slync.io fires CEO Chris Kirchner, strips board chairmanship
Source claims Slync.io CEO retaliated after suspension
Slync.io blames liquidity issues after employees go month without pay
The post Ex-Slync CEO Chris Kirchner guilty of wire fraud, money laundering appeared first on FreightWaves.