Slync co-founder Christopher Kirchner was sentenced to 20 years in federal prison Thursday, months after being convicted of defrauding investors of $25 million .
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The sentencing closes the book on two years of drama that saw the disgraced executive suspended and later ousted as CEO of the supply chain software company.
The 37-year-old Kirchner founded Slync in 2017, serving as the freight tech firm’s CEO and chair until his termination by the board of directors in 2022 after being sued by a former employee on allegations of misuse of corporate funds and missing payroll.
In February 2023, the accusations caught up to Kirchner, with the Securities and Exchange Commission (SEC) charging him for fraudulently selling more than $67 million in securities, while illegally pocketing $28 million for himself. He was indicted on the charges three months later.
This past March, a jury convicted Kirchner of four counts of wire fraud and seven counts of engaging in monetary transactions in property derived from specified unlawful activity.
Kirchner was sentenced to 240 months in federal prison by U.S. District Judge Mark Pittman, who also ordered him to pay more than $65 million in restitution.
“Even as his company was circling the drain, Chris Kirchner was spending millions of his investors’ money on himself. Apparently, projecting personal prosperity was more important to him than making payroll,” said Leigha Simonton, U.S. attorney for the Northern District of Texas, in a statement. “His duplicity earned him 20 years in prison. We are proud to hold him accountable for his crimes and are committed to pursuing all businesspeople engaged in criminal conduct.”
According to evidence presented at the sentencing hearing, between 2020 and 2022, Kirchner fraudulently raised more than $71 million from numerous investors based on false representations and promises about Slync’s business operations, false representations about Slync’s financials, false representations about Slync’s customers and “fantastical” revenue projections.
The jury’s verdict indicated that Kirchner then misappropriated over $25 million of the investor funds in various ways—confirming the charges levied by the SEC.
A statement from the Department of Justice said that Kirchner initiated nearly 100 wire transfers moving money from Slync’s Silicon Valley Bank account into the company’s account at JPMorgan Chase Bank between April 2020 and March 2022.
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From there, Kirchner then wired much of the money from the Chase account—accessible only by himself—to his personal bank accounts. In addition, Kirchner wired $20 million directly from Slync’s account into his personal checking account.
Corroborating the prior allegations from former Slync’s vice president of engineering Jason Selvidge that Kirchner used the Goldman Sachs-backed company as his “personal piggy bank,” the DOJ said the co-founder used the misappropriated funds to buy a $16-million private jet and a suite at AT&T Stadium. Among the other items Kirchner splurged on included vehicles like a Rolls Royce and Mercedes Benz G-Class, and jewelry including a $500,000 Richard Mille watch, several Rolex watches, and a Cartier necklace.
When cash-strapped Slync struggled to make payroll in spring 2022, Kirchner attempted to replace some of the money he had misappropriated by convincing at least four investors to wire approximately $850,000 to the company as part of a purported Series C investment round. However, Slync’s board never authorized a Series C investment round.
The DOJ statement said Kirchner offered various explanations for Slync’s payroll issues, all of which were untrue.
The report also highlighted that Kirchner fired a Slync employee after the employee reported to the board that he may have falsely exaggerated Slync’s financial performance to investors. That employee was identified as former chief financial officer (CFO) Samar Kandar in Selvidge’s lawsuit.
Immediately following his suspension in July 2022, Kirchner removed certain IT administrator privileges from key Slync employees, preventing them from accessing Slync’s computer systems. He then attempted to delete approximately 18 gigabytes of Slync data, including emails.
Kirchner’s issues coincided with the company’s downfall, with the tech firm generating a paltry $1.7 million in revenue between 2019 and 2022. Despite Slync’s failure to ever get off the ground, the supply chain technology provider was valued at $240 million in 2021 as the firm capitalized a then-high funding environment.
Slync’s intellectual property and the supply chain software itself now lives on in another form after being acquired in a bankruptcy auction.
Supply chain consulting and logistics technology provider Bluspark scooped up the assets, integrating Slync’s IP in its Voyix platform, which is designed to help importers and exporters better manage their supply chain data in one place.
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