Former Fabric CFO Nevin Shetty pleaded not guilty to fraud charges in May 2023. The case later resulted in a jury conviction on four wire-fraud counts in November 2025 and a two-year prison sentence in March 2026. The U.S. Department of Justice says $35,000,100 was transferred from Fabric to a company Shetty controlled; the court also ordered the same amount in restitution.
What happened after Shetty pleaded not guilty?
GeekWire reported on May 26, 2023, that Shetty entered a not-guilty plea at his first court appearance. That was the position at the start of the criminal case, not its final outcome. A jury found him guilty of four counts of wire fraud on November 7, 2025, after a nine-day trial, according to the U.S. Attorney’s Office for the Western District of Washington.
On March 5, 2026, the Justice Department announced that U.S. District Judge Tana Lin sentenced Shetty to two years in prison. The court ordered $35,000,100 in restitution and three years of supervised release after prison. It also barred him from serving as a company officer or director without prior permission from the probation office.
How did the transfer work, according to prosecutors?
The Justice Department’s accounts of the case say Shetty was hired as CFO of Seattle e-commerce startup Fabric in March 2021. In February 2022, he created HighTower Treasury, a cryptocurrency side business with no outside customers, according to DOJ.
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DOJ says Shetty was told in March 2022 that he could not continue as CFO because of performance concerns. From April 1 through April 12, he transferred $35,000,100 from Fabric to an account for HighTower. The government said no other executives or board members knew about the transfers. Fabric’s investment policy called for conservative investments and preservation of capital, and DOJ says Shetty had helped draft and circulate that policy.
The investment plan and losses
According to DOJ’s sentencing account, HighTower put the funds into high-yield decentralized-finance lending protocols that promised returns of 20% or more. The plan, DOJ said, was for HighTower to pay Fabric a comparatively small fixed amount and retain the remaining returns. Shetty and a business partner made roughly $133,000 in profit during the first month, according to the same release.
DOJ says the investments had fallen to nearly zero by May 13, 2022. Shetty then told two executives what he had done and was immediately fired, according to the government’s case summary. Adapting to the loss required Fabric to lay off 60 employees, the Justice Department said.
What was the sentence and what does it require?
- Prison: Two years.
- Restitution: $35,000,100, the amount the court ordered him to repay.
- Supervised release: Three years after prison.
- Corporate role restriction: He may not serve as a company officer or director without prior permission from the probation office.
At sentencing, Judge Lin described the effects on Fabric and its employees, saying the loss caused “significant and severe effects on the company” and that Shetty had been “playing with money that wasn’t yours.” These remarks were reported in the court’s sentencing coverage and reflect the judge’s comments at sentencing.
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How the plea-era allegations differ from the final outcome
When the indictment was announced in May 2023, the Justice Department described the charges as allegations and noted that Shetty was presumed innocent unless and until proven guilty beyond a reasonable doubt. The later jury verdict established the trial outcome: guilty on four wire-fraud counts. The 2023 not-guilty plea and the later conviction are different stages of the same case, not conflicting accounts of its current status.
Before trial, Shetty’s attorney, Cooper Offenbecher, said he was “personally devastated” by the losses, which the defense attributed to a catastrophic cryptocurrency-market crash, and said it looked forward to answering the allegations in court. That was the defense’s pretrial position; the jury later returned guilty verdicts.
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Sources and case timeline
- GeekWire, May 26, 2023: the plea report and pretrial statements.
- U.S. Attorney’s Office for the Western District of Washington, November 13, 2025: the jury verdict and trial account.
- U.S. Attorney’s Office for the Western District of Washington, May 17, 2023: the indictment announcement and its allegation-stage caveat.
- U.S. Attorney’s Office for the Western District of Washington, March 5, 2026: the sentence, restitution, supervised release and reported company impact.
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