The Cautionary
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Greed-to-Grief, No. 16

Greed-to-Grief, No. 16

The clothes do not make the woman

George Pillari
August 14, 2025

Software-as-a-Service, or SaaS came about as a method to reduce the upfront costs of software. Instead of having users, software companies now had subscribers. Instead of paying a budget-busting upfront licensing fee and shouldering the costs of hosting the software, businesses and consumers paid monthly subscriber fees under the SaaS model.

As one of the pioneers of the SaaS model, Salesforce.com launched in 1999 and only offered a cloud-based subscription. The entire technology industry jumped on the bandwagon, and before long, you could subscribe to Security-as-a-Service, Microsoft Office-as-a-Service, and many others.

The SaaS model made it easier for customers to say “yes” when making a buying decision since much of the financial and operational risk was shifted to the SaaS company, which financed the purchase, hosted the service in the cloud, and handled upgrades and bug fixes. Pretty sweet if you were a user of technology.

Entrepreneurs across all industries noted the SaaS model, even those in the fashion industry. And why not? Clothes have many of the same characteristics as software: large upfront costs and the need for constant upgrades.

The first players in the fashion market were Rent the Runway and Gwynnie Bee. While Rent the Runway focused on a broader business-oriented consumer, Gwynnie Bee zeroed in on the market for women’s clothing in sizes 10 and up, which comprised 75% of all women.

Christine Hunsicker founded Gwynnie Bee after serving as the COO for two successful technology startups. Armed with that experience and her undergraduate degree from Princeton, Hunsicker set out to dominate a new market: Clothing-as-a-Service, or CaaS.

Christine Hunsicker, Master Fraudster

A few years into a successful launch of Gwinnie Bee, Hunsicker expanded the brand to cover all women’s clothing sizes, compete with Rent the Runway, and rebranded the business as CaaStle. CaaStle continued to expand and capture market share while raising more than $350 million of venture capital.

Investors believed in Hunsicker because of her previous successes and the growth and profitability that CaaStle appeared to be producing. Hunsicker’s plans for the company were ambitious as she aimed to use data analytics and other modern technologies to transform the sometimes-painful experience of buying clothes. The subscription model kept customers happy as they avoided the large outlays associated with buying new clothes.

But it wasn’t long before the company ran into financial trouble. CaaStle did not manufacture garments but purchased them from others. As the cost of acquiring inventory rose, the company could not raise its rental prices fast enough to cover the acquisition costs and hang onto its customers.

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When the going gets tough? Well, the tough start cooking the books.

With her Ivy League degree, Hunsicker was pretty damn good at perpetuating a fraud that lasted over five years.

In one instance, she made up a set of audited financial statements that were distributed to a prospective investor. When questioned about the statements, she offered a pitiful excuse about that set of audits being for a class she was teaching at Princeton, and she sent them to the investor by mistake. (She never taught a class at Princeton.)

In another brazen move, she sent an investor a bank statement showing a balance of $200 million, when the actual balance was $200,000.

She also told an investor the company had a profit of $24 million for the previous quarter when the actual number was $300,000.

I am sure there are many other horror stories from investors who followed the intelligent, accomplished, and energetic Hunsicker down the path to financial ruin. The federal government is usually straight to the point in its communications, and its indictment of Hunsicker was no different:

"Christine Hunsicker defrauded investors of hundreds of millions of dollars through document forgery, fabricated audits, and material misrepresentations about her company's financial condition."

Investors lost all their money, Caastle was liquidated through a Chapter 7 bankruptcy, and Hunsicker faces up to 20 years in prison if convicted of charges that include identity theft and fraud.

Key Takeaways

This is a tough one to have seen coming. Well-educated and successful, Hunsicker fit the part of the female trailblazer. She must have been quite convincing as a presenter to work the fraud for as long as she did.
When somebody fabricates an audited financial statement, I have to tip my hat. Fortunately, an investor tried to verify the statement with the auditor, and the Hunsicker scheme started to unravel. Not a good idea to produce such an important document on behalf of a third party (the auditor) who could attest to its veracity.
Searches of Hunsicker’s computer turned up a trove of search terms related to fraud. She was thoughtful and premeditated in her actions, which goes to show us that if somebody really wants to commit fraud, it is sometimes hard to stop it.

Things I think about

The Pacific Ocean covers more of the Earth’s surface than all of the continents combined.

Greed-to-Grief, No. 16

The clothes do not make the woman

Key Takeaways

Things I think about

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