Tates Creek grad and startup founder convicted on wire fraud charges in Texas

Christopher Kirchner, the founder of Slync, a supply-chain management software startup, has been convicted of defrauding investors out of at least $25 million, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.

Kirchner, 36, a Tates Creek High School graduate and former University of Kentucky student, was charged via superseding indictment in December. He was previously charged via indictment with wire fraud and money laundering. After 4 days of trial, a jury convicted him of four counts of wire fraud and seven counts of engaging in monetary transactions in property derived from specified unlawful activity.

According to evidence presented at trial, Mr. Kirchner – who served as Slync’s CEO from 2017 until 2022, when he was terminated by the Board of Directors due to allegations of misconduct – converted at least $25 million in investor money to his own personal use.

Records indicate that Slync raised roughly $7 million in its Series A investment round and roughly $50 million in its Series B investment round. All investor funds, which were supposed to be used for “product development and other general corporate purposes,” were wired into the company’s account at Silicon Valley Bank.

Mr. Kirchner misappropriated the investor funds in various ways: Between April 2020 and March 2022, Mr. Kirchner initiated nearly 100 wire transfers moving money from Slync’s Silicon Valley Bank account into the company’s account at JPMorgan Chase Bank – an account only he had access to. He then wired much of the money from the Chase account to his personal bank accounts. In addition, Mr. Kirchner wired $20 million directly from Slync’s Silicon Valley Bank account into his personal checking account. He used some of those funds to buy a $16 million private jet and to secure a luxury suite at the stadium of a Dallas-area professional sports team.

When Slync, drained of funds, struggled to make payroll in the spring of 2022, Mr. Kirchner attempted to replace some of the money he had misappropriated by convincing at least four investors to wire approximately $850,000 to Slync as part of a purported Series C investment round. Slync’s Board of Directors never authorized a Series C investment round.

In the meantime, Mr. Kirchner offered various explanations for Slync’s payroll issues – all of which were untrue.

Mr. Kirchner also fired a Slync employee after the employee reported to the Board of Directors that Mr. Kirchner may have falsely exaggerated Slync’s financial performance to investors.

Immediately following his suspension by the Board of Directors, in late July 2022, Mr. Kirchner removed certain IT administrator privileges from key Slync employees, preventing the employees from accessing Slync’s computer systems. He then attempted to delete approximately 18 gigabytes of Slync data, including emails.

Mr. Kirchner now faces up 20 years in federal prison per count of wire fraud and up to 10 years in prison per count of engaging in monetary transactions in property derived from specified unlawful activity .

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Joshua D. Detzky, Nashonme Johnson, and Jay Weimer prosecuted the case. Assistant U.S. Attorney Dimitri Rocha is handling the forfeiture.

via U.S. Attorney’s Office, Northern District of Texas press release