Global Courant 2023-05-18 16:28:34
The former chief financial officer of a Seattle-based startup took $35 million of his employer’s money without permission and lost it investing in cryptocurrency before the crypto market crashed last year, according to a federal indictment returned by a grand jury on Wednesday .
Nevin Shetty, 39, was hired in March 2021 as CFO of a company called fabric, which makes software platforms for retail.
About a year later, after the company told him it was letting him handle job performance concerns, he secretly took the money and transferred it to HighTower Treasury, a crypto platform he operated as a sideline, the indictment said.
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His idea was to pay the company 6% interest and keep profits above that, but soon the $35 million investment was practically worthless, the US Attorney’s Office in Seattle said in a press release.
The indictment in the US District Court charged Shetty with four counts of telephony fraud. He will be arraigned on May 25.
Nevin Shetty, 39, the former CFO of a startup based in Seattle, Washington, lost $35 million he diverted from the company without permission during a crypto crash in 2022.
Shetty’s attorney, Cooper Offenbecher, said in an emailed statement that he and his client were in regular contact with prosecutors and disagreed with the decision to press charges.
“As CFO of his former employer charged with making investment decisions on behalf of Mr. Shetty, Mr. Shetty was personally devastated by these losses, which came as a result of a catastrophic crash in the cryptocurrency market in May 2022,” Offenbecher wrote. “We look forward to responding to these allegations in court.”
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However, prosecutors said when the company raised hundreds of millions of dollars in seed funding, it took a conservative approach to managing that money — a policy Shetty had helped create.
According to Seattle tech news website GeekWire, Fabric had raised more than $293 million by February 2022 and was valued at $1.5 billion.
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In an emailed statement, the company said it was cooperating with law enforcement and appreciated the work of the FBI and federal prosecutors.
“While the amount taken is significant, fabric remains very well funded with years of catwalk work,” the statement said.
