Former Fabric CFO Files Motion to Suppress Evidence in Crypto Investment Case

News | May 16, 2024 By:

On Tuesday, April 30, 2024, Nevin Shetty filed a motion to suppress evidence with the US District Court for the Western District of Washington. Shetty, the former CFO of Commerce Fabric Inc., is accused of wire fraud related to his investment of the company’s funds into a cryptocurrency-backed treasury account with HighTower Treasury.

In the filing, Shetty argues that the evidence against him, which includes documents and witness information obtained from a search warrant, should be suppressed. He claims the search warrant was based on a misleading and inaccurate affidavit that contained false statements and omitted key facts.

At the center of Shetty’s argument is the company’s investment policy. The affidavit stated that Shetty violated this policy by investing in cryptocurrency through HighTower. However, Shetty argues the affidavit misrepresented the policy. It failed to disclose that as CFO, the policy explicitly gave Shetty authority to approve investments outside of general guidelines.

Shetty also alleges other misleading claims in the affidavit. It stated he made the investment after receiving a termination notice, but Shetty says he was never terminated nor given such a notice. Additionally, the affidavit implied the HighTower investment was kept secret, but Shetty informed finance team members and the transaction appeared on company records.

If the court finds the affidavit contained intentionally false or recklessly misleading statements that were material to the probable cause determination, it would invalidate the search warrant under the Franks v. Delaware precedent. Shetty argues correcting the record would show there was no probable cause for any viable fraud theory against him.

The motion details Shetty’s authority as CFO to make investments and argues his actions do not meet the legal definition of wire fraud. It claims neither his self-interest in HighTower nor failure to disclose the cryptocurrency nature amounted to criminal deceit. Shetty is requesting suppression of all evidence collected during the search and information derived from it.

Please contact BlockTribune for access to a copy of this filing.