CFO Gets Prison Time After Losing $35 Million of Company Money in Crypto Side Hustle

There was a man from Washington convicted to two years in prison after diverting $35 million in money from his former employer to his own DeFi platform – and losing almost all of it.

Nevin Shetty, 42, was found guilty of bank fraud last November for taking and misusing money from the private software company where he worked.

Shetty, who established a “conservative” corporate investment policy, secretly moved $35 million in corporate funds to his side company HighTower Treasury after being told in April 2022 that his role as CFO would end due to performance issues. Those funds were then invested in high-yield DeFi lending protocols that promised returns of 20% or more.

According to the DOJ statement, Shetty planned to pay his employer a “relatively small, lump sum,” keeping the remainder of the proceeds for HighTower. Initially, the plan paid off, earning approximately $133,000 for Shetty and his HighTower business partner in the first month.

The wheels came off in May 2022, following the collapse of Terra and the ensuing crypto winter, which saw Shetty’s HighTower crypto investments plummet in value from $35 million to almost zero.

After confessing to colleagues at his employer, Shetty was fired from the company, which Judge Tana Lin said suffered “significant and serious consequences” as a result of his theft, adding that his actions “nearly bankrupted the company.”

Shetty’s two-year prison sentence is significantly lower than the nine years sought by the prosecutor, who urged a “severe punishment” to reflect the “web of lies” and the impact on the company, which was forced to lay off 60 people to adjust to the “huge loss” caused by his fraud.

Shetty was ordered to pay $35,000,100 in restitution and will be on supervised release for three years after prison. Judge Lin also imposed a special condition barring him from serving as an officer or director of any company without prior approval from the probation office.