A one-time University of Kentucky student stole more than $25 million from a technology company and used the money to buy a jet, a luxury sports box and expensive cars and watches, a federal grand jury has charged.
The grand jury indicted Christopher Kirchner, 35, last week on five charges of wire fraud and eight charges of money laundering.
Kirchner, of Westlake, Tex., was initially charged with wire fraud in a criminal complaint in February. The indictment added charges and details about what he allegedly did, including firing two employees who raised concerns about the company’s finances.
Kirchner pleaded not guilty after the initial charge. He has not had his initial court appearance on the indictment.
The company involved in the case was Slync.io, which Kirchner helped start in 2017. Slync provides supply-chain management software.
Kirchner went to Tates Creek High School and majored in marketing and communications at UK but left in 2009 before getting a degree, according to a magazine profile.
He was chief executive officer of Slync.
Where did the money reportedly go?
The company raised more than $50 million from investors in two rounds of stock offerings, the first in early 2020 and the second from December 2020 to May 2021, according to the indictment.
Kirchner allegedly started siphoning away much of the money as soon as it came in, moving it to accounts he controlled.
On Dec. 11, 2020, for instance, an investor wired $34 million to a Slync account at Silicon Valley Bank that was to be used for product development, company operations and to pay off a prior company loan.
Three days later, Kirchner moved $20 million of it to a personal account and then made a down-payment on a Gulfstream jet, the indictment says.
Another company employee had to sign off on financial transfers over $100,000, but Kirchner side-stepped that control through nearly 100 transfers in 2020 and 2011 of less than $100,000, the indictment alleges.
In the case of the $20 million transfer, Kirchner allegedly lied to the other employee about how it would be spent in order to get him to approve it.
The indictment includes additional examples of how Kirchner allegedly spent the money he took, including:
- $484,894 to private jet companies before he bought his own jet with $16 million he took
- $495,000 for a luxury sports box
- $22,000 to a country club
- $1.4 million for a residential lot in Westlake, which is in the Dallas-Fort Worth area
- $669,453 for a down-payment on a house
- $283,261 for a Mercedes Benz sports utility vehicle
- $16,957 to a Napa Valley vineyard.
Kirchner restricted other employees’ access to financial information during much of the time he was CEO, according to the indictment.
The company did not put in place formal accounting or financial control functions while he was CEO, the indictment says.
After Slync missed payroll several times in April, May and June 2022, business publications did stories on the problems and highlighted Kirchner’s “lavish lifestyle,” the indictment says.
Kirchner told company board members that Slync’s funding was invested in assets it couldn’t sell quickly to raise cash, and later told the board the government had frozen company assets because he had done business personally with entities in Russia that were under U.S. sanctions.
Those explanations were not true, the indictment said.
Employees raise red flags
Kirchner falsified documents, including one confirming a transfer of money to pay employees, to try to cover up the problems.
At least two company employees also raised concerns to board members.
One, not named in the indictment, had been brought on in late 2021 to help manage financial records.
That employee ultimately told board members in May 2022 he believed Kirchner was exaggerating the company’s revenue and customer numbers.
Kirchner allegedly cut off the employee’s computer access and later fired him.
In another case, Kirchner fired a manager in the Slync engineering department who emailed board members with concerns about Kirchner’s management, the indictment says.
After the board suspended Kirchner in late July 2022, he removed computer access from key employees and tried to delete a large amount of data, according to the indictment.
The board fired him in August 2022.
“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. “Investors deserved honesty; instead they got chicanery.”
Kirchner’s attorney did not respond to an email.
The indictment lists property the government wants to seize and sell if Kirchner is convicted, including the Mercedes Benz SUV and a Rolls Royce SUV; four Rolex watches; a Cartier necklace; 11 cases of wine; his house; and several financial accounts.
The wire-fraud charges are punishable by up to 20 years in prison each. The maximum sentence on the money-laundering charges would be 10 years each.