After dropping BDO as their auditor this CEO just continued signing off in financial statements under BDO's name. The craziest part is her skating through getting caught initially. One investor noticed a falsified date: she told him that those were fake statements made for a university lecture and refunded his investment. Eventually the board caught on and prohibited her from raising more investments, but she just kept selling shares behind their backs. Everyone involved had some financial interest in not making a public fuss.
> This included alleged representations that CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually lost $81 million on revenue of $15.7 million.
> lawyers said the indictment presented “an incomplete and very distorted picture”
“There is much more to this story, and we look forward to telling it,”
"This included alleged representations that CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually lost $81 million on revenue of $15.7 million." - Seriously, why would someone attempt to pull this? This lie seems really easy to catch. I don't get it?
A prominent entrepreneur who founded the now-bankrupt clothing technology startup CaaStle was criminally charged on Friday with defrauding investors out of more than $300 million, the U.S. Department of Justice said.
After dropping BDO as their auditor this CEO just continued signing off in financial statements under BDO's name. The craziest part is her skating through getting caught initially. One investor noticed a falsified date: she told him that those were fake statements made for a university lecture and refunded his investment. Eventually the board caught on and prohibited her from raising more investments, but she just kept selling shares behind their backs. Everyone involved had some financial interest in not making a public fuss.
My thoughts:
- Did someone really make a VC-backed "Rent-a-swag"?
- Did they also go full Saperstein?
Yep. They did.
> This included alleged representations that CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually lost $81 million on revenue of $15.7 million.
> lawyers said the indictment presented “an incomplete and very distorted picture” “There is much more to this story, and we look forward to telling it,”
I wonder how that'll work out for the founder
"This included alleged representations that CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually lost $81 million on revenue of $15.7 million." - Seriously, why would someone attempt to pull this? This lie seems really easy to catch. I don't get it?
"Fake it til you make it" is near-universal in the space. You just never hear about the ones who do make it.
Do investors do due diligence anymore?
A prominent entrepreneur who founded the now-bankrupt clothing technology startup CaaStle was criminally charged on Friday with defrauding investors out of more than $300 million, the U.S. Department of Justice said.
40-under-40. They always are.
seems to be the pattern doesn't it.
This hedge fund manager did a review on Youtube
https://www.youtube.com/watch?v=V36kSqwjaaw&t=7s
Federal charges = pardon potential.