Federal prosecutors on Wednesday charged the former CFO of a Seattle-based e-commerce startup with wire fraud.
According to an indictment filed in US District Court in Seattle, former Fabric CFO Nevin Shetty funneled about $35 million of the company's funds to a cryptocurrency business he controlled.
The indictment says that after being told in March 2022 that he would be fired due to concerns about his job, Shetty secretly wired the money into an account at HighTower, his cryptocurrency business, last April.
When the cryptocurrency market crashed on May 13 last year, the value of these funds was close to zero.
According to the indictment, in March 2022, Fabric adopted a policy of investing its cash in conservative types of investments.
The indictment says Shetty's plan was to pay Fabric 6% a year on its investment and withhold further profits for HighTower.
Shetty, 39, will appear in court on May 25.
Shetty joined Fabric in March 2021. He was previously the CEO of Seattle-based startup Blueprint Registry, which was acquired by David's Bridal in 2018.
Shetty's attorney, Cooper Offenbecher, said in a statement that he and his client disagree with the allegations.
“As CFO of his former employer, tasked with making investment decisions for him, Mr. Shetty has been personally devastated by these losses caused by the catastrophic cryptocurrency market crash in May 2022,” he said in an interview. . declaration. "We look forward to hearing these allegations in court."
Fabric was valued at $1.5 billion last year after raising a $140 million Series C round led by SoftBank. To date, Fabric has raised nearly $300 million.
The company provides software, APIs, and other behind-the-scenes technologies used by B2B retailers and brands for many aspects of online commerce, including pricing/promotions, inventory management, digital storefronts, and checkout/checkout.
“Since May 2022, Fabric has been cooperating with law enforcement in the investigation into former CFO Nevin Shetty's $35 million misuse of Fabric,” the company said in a statement to GeekWire. “We are grateful and appreciate the hard work that the FBI and the US Attorney's Office have done to resolve this matter. While the amount received is significant, the fabric remains very well grounded throughout the fair's years of operation."
GeekWire at Scribd has filed a lawsuit against the former CFO of a Seattle startup after he allegedly funneled $35 million of the company's funds into a cryptocurrency business.