A finance chief’s wire fraud case that prosecutors opened more than two years ago in Washington state has wrapped up.
Nevin Shetty, the former CFO of Seattle e-commerce startup Fabric, was convicted of four counts of wire fraud late last week after “taking and misusing some $35 million from his former employer,” U.S. Attorney Charles Neil Floyd said Thursday. He’s set to receive sentencing — which could be up to 20 years in prison — on Feb. 11, 2026.
The case hinges on a transfer of more than $35 million from Fabric to a cryptocurrency platform that Shetty ran as a side business. Prosecutors said Shetty made the transfer in early April 2022. He had formed the side business, known as HighTower Treasury, in February 2022, and, according to Floyd’s office, it had “no other outside customers.”
Prosecutors said Shetty “secretly transferred the funds” out of Fabric’s account shortly after he was told he would not continue as CFO over performance concerns in March 2022. At the time, he had agreed to leave the company “in or around June 2022,” according to the indictment.
“No other executives or board members at the company knew of these transfers,” according to a news release issued by Floyd’s office.
According to Floyd, Shetty put the funds in “decentralized finance” platforms that promised to generate 20% interest.
“Shetty’s idea was that HighTower would pay Shetty’s company 6% of that interest and keep the remainder of any interest earned from the cryptocurrency investments for HighTower, which could have been substantial,” Floyd’s release said. “As an owner of HighTower, Shetty stood to keep those profits.”
While Shetty earned about $133,000 in the first month, the value of his cryptocurrency investments quickly dropped. By May 2022, his initial $35 million investment was “nearly zero,” according to prosecutors.
Shetty then told two executives about his scheme and was immediately fired. The FBI launched an investigation after his employer reported the incident.
“This defendant exploited his position of power and trust in an attempt to profit from his crime and then lied to cover it up,” Floyd said in the release.
Shetty’s actions also appear to have violated his employer’s policies on investments. According to Floyd’s office, the startup had developed an investment policy statement that “called for company cash to be invested only in money market accounts or other conservative investments.”
Alex Little, an attorney with law firm Litson who represented Shetty in the case, said that the defense plans to appeal the conviction.
“We’re disappointed in this result but will vigorously pursue an appeal,” Little said in an email to CFO.com. “A corporate officer should not be prosecuted for making an investment with which his board later disagrees. We also are saddened that the U.S. Attorney had to resort to accusing the defense of lying in a press release. If he had watched the trial, he would know that much of what his staff wrote for him to say is untrue.”
Shetty was indicted in May 2023. As the case moved through the justice system, it drew the attention of the National Association of Criminal Defense Lawyers, which filed an amicus brief supporting Shetty’s motion to dismiss the charges in August 2024.
At the time, the group said the case “reflects yet another improper attempt by the government to stretch the wire-fraud statute beyond its breaking point.”
“In this instance, the government is attempting to criminalize an allegedly self-interested investment decision made by an executive with the authority to make such an investment—simply because he allegedly did not disclose complete and accurate information to others at the company,” NACDL wrote in the amicus brief. “That is not wire fraud, as evidenced by the (government’s) moving-target attempts to characterize the purported criminality.”
When the charges were announced in May, an attorney for Shetty told sister publication CFO Dive that the defendant was “personally devastated by these losses, which occurred as a result of a catastrophic crash in the cryptocurrency market in May 2022.”
(Editor’s note: This story was updated to include a quote from Shetty’s defense attorney.)
