Startup founder sentenced to 20 years in prison for fraud

• Founder Chris Kirchner was sentenced to 20 years in prison for using start-up capital for private purposes.
• Prosecutors alleged that Kirchner bought a private jet worth $16 million, among other extravagant purchases.
• The supply chain tech startup founded by Kirchner called Slync was closed in October 2023.

Chris Kirchner, a startup founder convicted of investor fraud, money laundering and wire fraud, was sentenced to 20 years in prison Thursday after using $25 million of his backers’ cash for personal purposes, court documents show.

Kirchner, 36, founded a supply chain tech startup called Slync and raised more than $50 million from venture capitalists, including Goldman Sachs, between 2018 and 2021. He transferred millions of the company’s funding to himself in 100 separate transactions through multiple accounts, according to prosecutors. He also transferred $20 million directly into his own checking account, according to the U.S. Attorney’s Office in the Northern District of Texas.

In addition to the prison sentence he must serve in Dallas and Fort Worth, Kirchner was ordered to pay restitution of $65,415,938.12. The judge did not impose a fine because “the defendant has neither the financial means nor the future earning potential to pay a fine,” the sentencing documents state.

“Even as his company was going under, Chris Kirchner was spending millions of investors’ money on himself,” said Leigha Simonton, U.S. Attorney for the Northern District of Texas, in an email statement. “It appears that he cared more about promoting personal wealth than paying salaries. His duplicity earned him 20 years in prison. We are proud to hold him accountable for his crimes and are committed to prosecuting all businesspeople guilty of criminal conduct.”

In June 2022, some Slync BI employees reported that they had not received their wages for weeks. At the time, Kirchner insisted that the company was financially viable. In the weeks before, he had attempted to buy the English football club Derby County, which caused a stir among the club’s fans on social media and in the sports press.

The startup also attracted attention through its participation in expensive sports sponsorships, including a five-year deal to sponsor the DP World Tour Desert Classic golf tournament, which is unusual for a startup.

Kirchner eventually withdrew his offer for the football club and blamed software providers for his company’s payroll problems. The golf contract was also soon terminated.

Kirchner was suspended from his company’s board in July 2022 and fired the following month. The board appointed a new CEO and the company attempted to recover but eventually closed in October 2023.

In February 2023, the FBI raided Kirchner’s home in West Lake, Texas. He was subsequently charged with securities fraud and arrested. He was indicted in May of last year and additionally charged with defrauding investors in January 2024.

Kirchner’s lawyers did not immediately respond to a request for comment.