Shetty, who drafted a “conservative” company investment policy, secretly moved $35 million in company funds to his side business 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.
Per the DOJ’s statement, Shetty planned to pay his employer a “comparatively small, fixed amount,” keeping the remainder of the returns for HighTower. Initially, the scheme paid off, earning some $133,000 in its first month for Shetty and his HighTower business partner.
After confessing to colleagues at his employer, Shetty was fired from the company, which, according to trial judge Tana Lin, suffered “significant and severe effects” as a result of his theft, adding that his actions “almost put the company out of business.”
Shetty’s two-year prison sentence is significantly lower than the nine years requested by the prosecution, which urged for “stern punishment” to reflect the “web of lies” and impact on the company, which was forced to lay off 60 people in order to adapt to the “massive loss” caused by his fraud.
Shetty was ordered to pay $35,000,100 and will be placed on supervised release for three years after prison. Judge Lin also imposed a special condition blocking him from serving as an officer or director of a company without prior permission from the probation office.
