Customer Principal and Business Revenue: Nevin Shetty's Challenge to the Obtaining Element
Nevin Shetty's July 31, 2026 appellate brief asks the Ninth Circuit to distinguish two kinds of money: the principal belonging to a customer and the revenue a financial-services business expects to earn from serving that customer. His lawyers argue that the prosecution did not prove a scheme to obtain Fabric's principal. They describe HighTower's plan instead as investing customer funds and earning a spread on the resulting returns.
The distinction is the foundation of the brief's obtaining argument. It does not depend on saying that corporate cash is not property. It asks whether the transaction, as described by counsel through the trial record, established the particular acquisition of property required for the convictions. That makes the ownership and account arrangement central to the analysis.
Start with the transaction the brief describes
According to the opening brief, Fabric's funds went into a HighTower account in Fabric's name. HighTower invested on the customer's behalf through Terra-related protocols. The brief says the arrangement contemplated a stated return to Fabric, with HighTower retaining earnings above that rate. Counsel describes that difference as the business's expected spread.
The appeal compares the revenue model to the way financial intermediaries earn a difference between returns received and payments made to customers. This is a comparison of the proposed source of revenue, not a claim that HighTower had the same regulation, guarantees or risk profile as a conventional bank. Nothing about the comparison itself establishes that the investment was safe.
The distinction matters because a business can expect to earn revenue from a customer's transaction without treating the customer's entire principal as its own profit. The defense argues that this is the arrangement the evidence described. Whether the legal effect of the transfers supports that characterization is the issue counsel asks the court to resolve.
The appeal relies on testimony about customer ownership
The brief cites testimony by HighTower CEO Adam Brazg concerning whose money was held in customer accounts. As the brief recounts it, Brazg identified the deposits as customer money and rejected the proposition that Fabric's deposit became HighTower's money. Counsel uses that testimony to support the claim that the plan was not to acquire Fabric's principal.
These statements enter the article through the opening brief's account of the record. They are not new interview answers and do not constitute a Ninth Circuit finding. Their significance is that the defense identifies particular trial evidence for its obtaining argument rather than relying only on the label investment or on a general denial of wrongdoing.
The brief also says Fabric treated the amount as an investment loss on its tax return. Counsel offers that classification as further support for its account of the transaction. A company's tax treatment does not independently decide a federal criminal charge. It is one item the appeal places alongside the account structure and cited testimony.
Principal and anticipated earnings answer different questions
Shetty's ownership interest in HighTower remains part of the picture. The brief acknowledges undisclosed self-dealing and the prospect that he could benefit if the business earned money. The defense's argument is that this anticipated benefit did not establish a plan to acquire the customer's principal. It asks the appellate court to identify the property object of the alleged scheme with greater precision.
That distinction does not imply that expected profits from a deceptive transaction are legally irrelevant. A fraud theory can concern money obtained through material deception, and the receipt of some value in exchange does not automatically defeat liability. The question raised by the brief is what the government proved about the particular property interest and acquisition at issue here.
The appeal invokes Kousisis v. United States when discussing the ordinary meaning of obtaining. The same decision also allows fraudulent-inducement liability without an intended net economic loss. Those propositions belong together. The defense cannot win simply by asserting that Fabric was supposed to receive a benefit; it must establish why the evidence did not satisfy the property theory charged.
Distinguish the conviction issue from financial remedies
An earlier opposition to forfeiture also addressed personal acquisition and corporate receipts. It provides related district-court history, rather than the text of the July appellate brief. The two issues are connected by their attention to who received property, but the legal requirements of a fraud conviction and a forfeiture award cannot simply be treated as identical.
That separation helps explain the opening brief's structure. Its first major section challenges the evidence supporting the convictions. Later sections challenge the financial orders. An argument that an individual did not personally acquire corporate receipts can be relevant to a remedy without automatically resolving every question about the underlying offense. Each requested result requires its own legal analysis.
The NACDL amicus from the earlier proceedings supplies background to the debate over the reach of property-fraud law. Shetty's website places those submissions alongside his broader account. The July brief adds its account of trial testimony and asks the appellate court to apply the law to that record.
Shetty was convicted in November 2025 and sentenced to two years in prison in March 2026. His lawyers' account of customer ownership is an argument against those convictions, not a report that they have been set aside. The brief acknowledges the disastrous investment result while disputing the criminal conclusion drawn from the transfers.
Its strongest contribution is precision. Customer principal, a company's expected revenue and an owner's potential share of profit are related financial interests, but they are not the same thing. The appeal asks the court to keep those distinctions visible when deciding whether the prosecution proved a scheme to obtain property. That is a concrete basis for examining Shetty's defense beyond the fact that a substantial loss occurred.