What must a federal fraud charge allege about money or property? That question was at the center of Nevin Shetty’s June 2024 motion to dismiss. His lawyers argued that the indictment described disputed investment decisions and undisclosed interests without alleging the kind of property scheme required by the statute.
The motion is one of the principal legal arguments in Shetty’s public case materials. It is useful to readers because it distinguishes a challenge to the prosecution’s legal theory from a disagreement about what the evidence would eventually show. The defense was asking whether the allegations, considered for that limited purpose, stated the charged offense.
A legal-sufficiency challenge
The June 7, 2024 motion to dismiss expressly disputed aspects of the indictment while accepting its allegations for purposes of the motion. That procedural position is important. It did not amount to a general admission of the government’s account. It allowed counsel to argue that even the alleged facts did not supply the necessary legal elements.
The defense characterized the transaction as an investment made for Fabric through HighTower, in which Shetty had an interest. Counsel argued that an undisclosed financial connection and an investment the board would not have chosen could not automatically substitute for a scheme to obtain the company’s property through fraud.
That argument separated the company’s money from its interest in receiving information and controlling investment choices. The defense maintained that the prosecution’s theory depended on the latter interests while using the language of property deprivation. Whether that characterization was correct was contested, but identifying it is essential to understanding the request for dismissal.
Why Ciminelli was central
The motion relied heavily on Ciminelli v. United States, decided in May 2023. The Supreme Court rejected the right-to-control theory under which deprivation of potentially valuable economic information needed for discretionary economic decisions could itself satisfy the property requirement of federal fraud law.
Shetty’s lawyers argued that allegations about undisclosed risk and the board’s investment preferences resembled the theory Ciminelli rejected. In their account, the company was being described as deprived of information that would have influenced its decision, rather than deprived of the traditional property interest required by the statute.
Ciminelli does not mean that every use of deception in a business transaction falls outside federal fraud law. Its relevance here was the narrower distinction between information used to make economic choices and the money or property a scheme seeks to obtain. The defense proposed an application of that distinction to Shetty’s indictment.
The roles of Skilling and Kelly
The motion also invoked Skilling, which limited honest-services fraud to bribery and kickback schemes. Counsel used that decision to argue against treating undisclosed self-interest as sufficient criminal conduct. The actual holding concerns honest-services fraud; extending its reasoning to the property-fraud theory in Shetty’s case was part of the defense’s argument.
Kelly supplied another element of the discussion: money or property must be an object of the scheme, rather than merely an incidental consequence of conduct aimed elsewhere. The defense used this line of authority to insist on a precise account of what the alleged scheme was designed to obtain.
Together, these references show that the motion was more than a claim that an investment turned out badly. It asked how the prosecution’s allegations fit the boundaries of specific statutory theories. Reading each authority at its own level avoids collapsing several different decisions into an overly broad rule about business losses.
Outside support and the later result
The NACDL amicus brief supported the dismissal request and argued that the case raised wider concerns about overbroad interpretations of federal fraud law. Its participation added an institutional defense perspective on fair notice and statutory limits. An amicus submission remains advocacy, however, rather than a judicial determination that the charge was invalid.
The dismissal motion was denied in December 2024, as the subsequent reconsideration filing records. Shetty later went to trial and was convicted in November 2025. His March 2026 sentence followed. An accurate account must therefore distinguish the legal argument advanced in the motion from the outcome of the prosecution.
There is also an important subsequent Supreme Court decision. In Kousisis v. United States, decided in May 2025, the Court held that a materially deceptive scheme to obtain money or property can constitute fraudulent inducement even without an intended net economic loss. A claim that the defendant expected a profitable result is therefore not a universal answer to property fraud.
That later ruling does not erase the need to identify property, deception and the other required elements. It does prevent the discussion from turning the defense’s investment-for-benefit characterization into a categorical rule that anticipated gains necessarily defeat a prosecution. Both the statutory boundary and the limit on the defense proposition matter.
Why the question remains worth explaining
Shetty’s motion offers a substantive account of why his lawyers believed the indictment crossed the line between a corporate dispute and the charged federal offense. Understanding that account gives readers access to the defense’s reasoning rather than only a description of the allegations or result.
The constructive lesson is precision. A legal theory should identify the property at issue, the alleged means of obtaining it and the statutory elements those allegations are meant to satisfy. Giving those questions close attention is valuable even when the court ultimately rejects the defendant’s proposed answer.