In a significant case highlighting corporate fraud, Nevin Shetty, the former chief financial officer of the Seattle-based retail software company Fabric, received a two-year prison sentence for his role in a wire fraud scheme involving the misuse of $35 million from the company. Sentencing took place in U.S. District Court in Seattle, where Judge Tana Lin emphasized the devastating impact of Shetty’s actions, which resulted in job losses for approximately 60 employees and nearly jeopardized the company’s future.
Shetty, aged 42 and residing in Mercer Island, Washington, was convicted last November after a comprehensive nine-day jury trial where he faced four counts of wire fraud. The court heard from Assistant U.S. Attorney Philip Kopczynski, who argued for a nine-year sentence, describing Shetty’s crime as a “calculated scheme motivated by greed” executed over several months.
In addition to his prison sentence, Shetty was ordered to pay restitution of $35,000,100. Upon completing his term, he will be subject to three years of supervised release with special conditions preventing him from holding positions as an officer or director in any company without prior approval from his probation officer.
Shetty joined Fabric in March 2021, during a pivotal time for the company, which had recently raised significant funding from investors, including $43 million. His responsibilities included drafting a policy designed to govern the investment of these funds conservatively. However, in early 2022, Shetty diverted company funds to finance his own cryptocurrency venture, HighTower Treasury, without authorization.
Despite his involvement in establishing investment restrictions, Shetty moved the company’s money into high-risk decentralized finance platforms with promising but ultimately unreliable 20% returns. While he initially managed to profit approximately $133,000 in the first month, the situation deteriorated rapidly, and by May 2022, the value of the investments plummeted, leading to a near-total loss of the $35 million.
Following his confession to colleagues about the fraudulent activities, Shetty was terminated, and the company promptly reported the incident to law enforcement. He was subsequently indicted in May 2023, bringing to light a cautionary tale of corporate governance and oversight amid rapidly changing financial landscapes.
