Nevin Shetty, a former CFO of a Seattle startup, was indicted May 17 in US District Court in Seattle for wire fraud.
According to the accusation, Shetty, 39, diverted approximately $35 million from company coffers to a cryptocurrency platform under his personal control. Shetty reportedly created this platform, known as HighTower Treasury, in February 2022, shortly before he was notified of his impending departure as CFO due to performance concerns.
During the period from April 1 to April 12, 2022, Shetty allegedly transferred a substantial amount of $35,000,100 from her employers to an account linked to HighTower without the knowledge of anyone else within the company. ANDThe alleged purpose of this transaction was for HighTower to allocate the funds to investments in the decentralized finance (DeFi) sector of the cryptocurrency market. This arrangement meant that Shetty’s company would receive an interest rate of 6%, while HighTower would keep the remaining interest, potentially earning them considerable profits.
Prosecutors say the value of Shetty’s cryptocurrency investments began to decline rapidly, and by May 13, 2022, the $35 million investment had essentially lost its value. Upon discovering the embezzlement, the startup quickly reported the incident to the Federal Bureau of Investigation, triggering an investigation into the matter. If convicted of wire fraud, Shetty could face a maximum sentence of 20 years in prison. His appearance is scheduled for May 25, 2023.
In a similar case, Cooper Morgenthau, former CFO of the African Gold Acquisition Corporation, was sentenced to three years in prison for embezzling more than $5 million from multiple special purpose acquisition companies (SPACs). Between June 2021 and August 2022, Morgenthau transferred around $1.2 million to his personal accounts and used the money to trade cryptocurrencies and meme stocks, resulting in significant losses.
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