| What to Know: – Former Fabric CFO convicted on four wire fraud counts; sentenced to two years. – Diverted about $35 million, violating FDIC-insured, conservative treasury-account policy. – Sentence reflected loss scale and abuse of trust, not ordinary investment risk. |
According to the U.S. Attorney’s Office for the Western District of Washington, Nevin Shetty, the former CFO of Fabric, was found guilty on November 7, 2025, after a nine-day jury trial on four counts of wire fraud and was sentenced to two years in prison. The office said he diverted about $35 million from the company and violated a treasury policy requiring funds be kept in conservative, FDIC-insured accounts. The case focused on undisclosed transfers and intent to circumvent internal controls rather than ordinary investment risk.
The two-year term reflects federal sentencing factors, including the scale of the loss and the abuse of a position of trust. While prison time was imposed, the matter also underscores the legal distinction between permitted risk-taking and deceptive conduct. Any subsequent developments, including potential post-judgment proceedings, remain uncertain.
As reported by the Seattle Business Journal, Shetty routed company cash into a fraudulent cryptocurrency vehicle in 2022 after moving funds out of corporate accounts. The transfers bypassed standard approvals and reclassified treasury cash as an external investment outside FDIC-insured accounts. In decentralized finance, funds can be deployed into lending pools via smart contracts with minimal gatekeeping, enabling rapid, less transparent movement once corporate controls are bypassed.
“In less than one month, Mr. Shetty stole $35 million from his employer that he knew was meant to be kept in conservative investments… Instead, he lost almost all of it through risky cryptocurrency investments,” said Jonathan Dean, Assistant Special Agent in Charge at FBI Seattle.
For governance, the record highlights the need for enforceable treasury mandates, segregation of duties, and real-time monitoring of cash movements. Clear approval workflows and independent reconciliation can help prevent undisclosed transfers, especially where crypto and decentralized finance create operational complexity.
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