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Nevin Shetty, a previous chief financial officer (CFO) at a startup in Seattle, was charged on May 17 in the United States District Court in Seattle with wire fraud.
The charges claim that Shetty, 39, misappropriated roughly $35 million from the startup’s funds to a cryptocurrency platform that he controlled personally. It is reported that Shetty created this platform, referred to as HighTower Treasury, in February 2022, shortly before he was informed of his upcoming exit as CFO due to concerns about his performance.
Between April 1 and April 12, 2022, Shetty allegedly transferred a significant sum of $35,000,100 from his employer to an account associated with HighTower without the awareness of any other company personnel. The purported intention behind this transfer was for HighTower to invest the funds in the decentralized finance (DeFi) segment of the cryptocurrency market. This setup involved Shetty’s company earning a 6% interest rate, while the remaining interest would be kept by HighTower, potentially generating substantial profits.
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Prosecutors indicate that the value of Shetty’s cryptocurrency investments began to plummet rapidly, and by May 13, 2022, the $35 million investment had effectively become worthless. After uncovering the embezzlement, the startup quickly notified the Federal Bureau of Investigation, leading to an investigation into the situation. If found guilty of wire fraud, Shetty could face a maximum penalty of 20 years in prison. He is anticipated to be arraigned on May 25, 2023.
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In a related case, Cooper Morgenthau, the former CFO of African Gold Acquisition Corporation, received a three-year prison sentence for embezzling over $5 million from various special purpose acquisition companies (SPACs). From June 2021 to August 2022, Morgenthau transferred approximately $1.2 million to his personal accounts and utilized the funds to trade cryptocurrencies and “meme stocks,” resulting in considerable losses.
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