Christopher Kirchner, the co-founder and former CEO of Slync, Inc., a Texas-based logistics software company, was charged Tuesday with fraudulently selling more than $67 million securities, while illegally pocketing $28 million for himself, according to the Securities and Exchange Commission (SEC).
Kirchner was charged in U.S. District Court for the Northern District of Texas with violating the antifraud provisions of the federal securities laws for crimes, the SEC says, that were committed between January 2020 and January 2022.
According to the agency, Kirchner “misrepresented the financial condition of Slync to investors, including concerning the amount of revenue received from customers and the nature and volume of contracts with existing and potential customers, as well as the planned use of fundraising proceeds.”
In that time and before Kirchner was fired in August of 2022, the SEC alleges that the disgraced co-founder took funds from Slync investors, and transferred money from company accounts to his own, to the tune of more than $28 million, as well as paying personal expenses straight from a corporate account.
The government alleges that Kirchner used Slync money to fund his personal investment KFIM LLC, purchase a $16 million personal private jet and fund the lavish lifestyle that also came at the expense of his employees, who, according to the SEC weren’t paid for weeks at a time. Kirchner was suspended at the time and fired a month later.
“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. “The Enforcement Division remains laser-focused on uncovering and rooting out such brazen fraud and charging individuals who seek to induce investors to buy securities through lies and decepti\n.”
If convicted, Kirchnr faces up to 20 years in prison. In addition, the SEC says the government is seeking injunctive relief, disgorgement with prejudgment interest, civil penalties, and an officer and director bar.
Slync’s software platform automates backend logistics functions, such as documentation, invoicing and carrier management.
The company, backed by Goldman Sachs and valued at more than $240 million, named John Urban, who had been with the company as a strategic advisor since 2018, its CEO to succeed the sacked Kirchner. Former Slync chief of staff Tim Kehoe was named acting president at the time of Kirchner’s ousting.
“I’m ready to lead Team Slync,” John Urban said upon his appointment in October. “We have so much more to accomplish; stay tuned.”
Kirchner’s troubles came to light last July when former VP of engineering Jason Selvidge filed a wrongful termination lawsuit that brought to light the missed payment to workers. Selvidge’s complaint accused Kirchner of treating Slync as a “personal piggy bank.”