Ex-Crooked Beverage Co-Founder Sentenced for Embezzling $45K

Christian Schenk, the 47-year-old former co-founder of the Minnesota-based Crooked Beverage Company, was sentenced to 45 days in jail this week after admitting to a scheme that drained tens of thousands of dollars from his own business.

The sentence, which includes two years of supervised probation, follows a guilty plea to a gross misdemeanor theft charge entered last August. A judge also stayed a 364-day jail term for two years, according to court records filed Monday.

The legal fallout stems from a November 2023 report filed by former Minnesota House Majority Leader Ryan Winkler. Winkler, who alerted authorities to the financial irregularities, alleged that Schenk had been utilizing the company’s Square account to fund a lifestyle that had little to do with the business of THC-infused drinks. By the time the partners confronted him, the damage was already done.

According to the criminal complaint, the deception went well beyond simple unauthorized spending. Schenk allegedly impersonated prominent Minnesota attorney Chris Madel, sending a fraudulent letter to his own business partners. The document falsely claimed that a court order requiring Schenk to pay over $300,000 to his ex-wife would not impact the company’s stability. This fabrication bought him the trust he needed to continue siphoning funds.

Ex-Crooked Beverage Co-Founder Sentenced for Embezzling $45K

Investigators discovered that Schenk, who held control over both a JPMorgan account and the company’s Square payment portal, treated the business treasury as a personal slush fund. Records indicate that more than $7,000 was funneled into luxury goods and retail purchases, including items from Louis Vuitton and Tiffany & Co. An additional $20,000 intended for company operations is also believed to have been misappropriated during the same period.

When authorities finally sat him down for an interview, Schenk was remarkably candid about his motivation. He admitted to withdrawing $47,950 from the business accounts in the weeks after his resignation, telling investigators that he was “super pissed” and felt the company owed him the money.

This blunt rationale provides a rare, unfiltered look at the internal collapse of a startup, where personal grievances were used to justify the systematic theft of corporate assets.

The Minnesota THC beverage industry is expanding rapidly as regulations change. As the state continues to refine its oversight of hemp-derived products, cases like this highlight the fragility of new businesses operating in a high-growth, high-stakes environment. For the partners at Crooked Beverage, the betrayal was not just a financial hurdle; it was a distraction that could have derailed their professional reputation in a competitive market.

While the legal proceedings against Schenk have reached a conclusion, the case serves as a sober reminder for investors and co-founders alike. In the rush to capture market share in the emerging cannabis-adjacent sector, the importance of rigid financial controls often takes a backseat to product development and marketing.

For a startup, losing nearly $50,000 isn’t just a rounding error—it is capital that could have been directed toward compliance, distribution, or manufacturing.

The court’s decision to hand down jail time reflects the severity of the breach of trust involved in Schenk’s actions. By impersonating legal counsel to deceive his own partners, he moved past simple theft into calculated fraud.

As the business community in Minnesota watches the fallout, the question remains how much more scrutiny will fall on the founders of similar startups. Transparency is no longer just a best practice; it is becoming the only safeguard against the kind of internal volatility that brought down this particular partnership.

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