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

Christopher Kirchner, 35, was charged via criminal complaint in February. On Tuesday, a federal grand jury indicted him on five counts of wire fraud and eight counts of money laundering.

“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,” said U.S. Attorney Leigha Simonton. “Investors deserved honesty; instead they got chicanery. We will not allow businesspeople to treat their stockholders this way. We look forward to proving our case against Mr. Kirchner in court.”

“As the indictment alleges, Mr. Kirchner chose to enrich himself by diverting corporate assets away from Slync in order to fund his lavish lifestyle. Deceptive acts of corporate greed not only erode investor confidence and employee trust, but also financial market integrity,” said FBI Dallas Special Agent in Charge Chad Yarbrough. “If you deceive and defraud your investors and employees, the FBI will persist in our efforts to bring you to justice.”

According to the indictment, 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 – allegedly 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 allegedly misappropriated the investor funds in various ways: Between April 2020 and March 2022, Mr. Kirchner allegedly 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 allegedly wired much of the money from the Chase account to his personal bank accounts.  In addition, Mr. Kirchner allegedly 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 allegedly attempted to replace some of the money he had allegedly 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 this Series C investment round.

In the meantime, Mr. Kirchner offered various explanations for Slync’s payroll issues.  He first claimed that the company’s cash was invested in illiquid assets that were difficult to divest.  Later, he said that the U.S. government had frozen the company’s accounts because he had transacted in his personal capacity with sanctioned entities in Russia. Neither explanation was true.

In June 2022, Mr. Kirchner allegedly fired two Slync employees who expressed concern about his management of the company.  One of the employees had reported that Mr. Kirchner may have falsely exaggerated Slync’s financial performance to investors.

Immediately following his suspension by the Board 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 allegedly attempted to delete approximately 18 gigabytes of Slync data, including emails.

An indictment is merely an allegation of wrongdoing, not evidence. Mr. Kirchner is presumed innocent until proven guilty in a court of law.

If convicted, he faces up to 20 years in federal prison per count of wire fraud and up to 10 years in prison per count of money laundering.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Joshua D. Detzky, Blake J. Ellison, and John de la Garza are prosecuting the case.