Feds charge Dallas tech company’s ex-CEO in $67 million fraud

Christopher Kirchner, co-founder and former CEO of software firm Slync Inc., has been charged with fraud by multiple federal agencies, accused of selling $67 million in securities to investors and then using nearly half to buy a private jet and pay for other personal expenses to "live extravagantly while not paying Slync's employees."

Kirchner, 35, was arrested at his home in Westlake on Tuesday morning, according to the U.S. attorney's office for the Northern District of Texas. He was charged by federal prosecutors with wiring $20 million from the firm's bank account to his own. He later appeared before U.S. Magistrate Judge Hal R. Ray Jr.

"This defendant flaunted his apparent wealth while allegedly diverting millions from company coffers into his private bank account," U.S. Attorney Leigha Simonton said in a statement. "Slync investors and employees are understandably outraged, and we sympathize."

The Securities and Exchange Commission also charged Kirchner with fraudulently offering and selling more than $67 million of securities in the company from 2020 through 2022 and misrepresenting its financial condition to investors. The SEC said he transferred tens of millions of dollars from Slync accounts to his personal accounts until his termination in August 2022.

According to the U.S. attorney's office, Kirchner told an employee by text that he was transferring money received from an investor into "an investment account" and a "chase" account.

He then instructed the employee to approve the wires, according to the government's complaint, and instead transferred $20 million of Slync funds into his personal account.

In emails, Kirchner told private bankers that the $20 million represented "a distribution from my company," according to the complaint. Slync's board of directors never authorized the distribution.

Kirchner is accused of using the $20 million — which amounted to roughly 40% of $50 million raised from private equity investors and venture capital groups during the company's Series B investment round — to fund a lavish lifestyle, including a $16 million Gulfstream jet and a $495,000 luxury suite at a local sports stadium, the U.S. attorney's office said.

In February 2021, financial giant Goldman Sachs invested $60 million in Slync.io to help the firm expand. Slync.io had left San Francisco for a new home in Dallas in June 2020 and received Series B funding through the Goldman Sachs Growth investment division. The funding is intended to give proven companies the assets to grow from startups to serious market competitors.

If convicted, Kirchner faces up to 20 years in federal prison.

Greg Kefer, chief marketing officer at Slync, said the firm is cooperating in the investigation of Kirchner.

"Slync is cooperating with the government in its investigations and, as a victim of Christopher Kirchner's actions, looks forward to a just resolution of this matter," Kefer said. "This investigation is not the company's primary focus. We have moved on with our new CEO, John Urban, and are focused on delivering next-generation technology to the global logistics industry."

According to the SEC, Kirchner also used Slync funds for his personal investment entity, KFIM LLC, and failed to pay employees on several occasions.

"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," Sheldon Pollock, associate director of the SEC's New York regional office, said in a statement.

Later in 2021, Kirchner wrote a letter to fans of the English soccer team Derby that he was looking to buy Derby out of administration.

Under Kirchner's leadership, Slync was once the official logistics partner of the Dallas Stars. According to The Athletic, the company didn't make its payments to the NHL team and owed more than $800,000 on the sponsorship deal.