Ex-Slync CEO Chris Kirchner was sentenced to 20 years in federal prison Thursday in the U.S. District Court for the Northern District in Fort Worth, Texas.
In his ruling, U.S. District Court Judge Mark T. Pittman also ordered Kirchner, 36, of Westlake, Texas, to pay over $65.4 million in restituion and recommended to the Bureau of Prisons that Kirchner be able to participate in its Inmate Financial Responsibility Program. The judge also seeks to have Kirchner be incarcerated at a facility near the Dallas, Fort Worth area, if possible.
Once released from prison, he will serve three years of supervised release.
What happened?
Kirchner has remained in custody since a jury found him guilty of four counts of wire fraud and seven counts of money laundering following a four-day trial in January. Pittman denied his motion seeking bail until sentencing. Kirchner was facing a maximum prison sentence of 150 years.
Prior to sentencing, Kirchner’s federal public defenders filed two motions to withdraw as counsel, which the judge denied. According to court filings, since being found guilty in January, Kirchner allegedly told his legal counsel that he intended to “represent himself for the remainder of this criminal action.”
On June 24, Kirchner indicated that he disagreed with his legal team’s strategy and “wished to terminate their relationship if [his] strategy was not followed.” Later that week, Kirchner refused to see his attorneys “indicating further his intention to either retain [counsel] or represent himself,” the motion stated.
Lavish lifestyle
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, sources told FreightWaves that 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.
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 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 while Slync was struggling to make payroll in spring 2022. He even 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 — investors, led by Goldman Sachs – agreed to inject more funding to pay U.S. and Canadian employees around $3.8 million.
After learning he was being suspended, Kirchner retaliated by locking some executives out of the company’s communication channels.
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.
Despite receiving an additional $24 million cash infusion from Goldman Sachs in February 2023 to help the logistics platform stay afloat, Slync was forced to seek an alternative option to a traditional bankruptcy and wind down operations in October 2023.
Three weeks before the Slync bankruptcy filing, Kirchner filed suit in September 2023 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.
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