Home / News / Riveter CEO and husband dispute FBI’s seizure of their bank …

Riveter CEO and husband dispute FBI’s seizure of their bank …

BigStock Photo / DeepPixel

In a new court filing, lawyers for Seattle entrepreneur Amy Nelson and her husband contend that her salary and earnings are being unfairly held by the government as part of the FBI’s seizure last year of more than $892,000 from their bank accounts.

The case is one of several disputes stemming from allegations that Nelson’s husband, former Amazon real estate transaction manager Carl Nelson, conspired with a colleague and others to receive millions of dollars in kickbacks in exchange for directing Amazon Web Services data center deals to a Colorado real estate developer, as detailed in a GeekWire story last week.

Carl Nelson denies claims that he and a coworker duped Amazon into working with the developer in exchange for bribes. His lawyers say broad allowances for outside work in his Amazon employment contract gave him leeway to do business with Amazon clients and customers.

In addition to being a defendant in a civil suit filed by Amazon, Carl Nelson is one of the subjects of an FBI criminal investigation, court records show.

Amy Nelson, CEO of The Riveter. (Riveter Photo)

Amy Nelson is CEO and founder of The Riveter co-working startup and women’s network, which raised nearly $20 million in funding with plans to open as many as 100 locations by 2022. That was before the pandemic, which forced the company to close all nine of its locations last year.

She is not named in Amazon’s civil suit. The Riveter itself is not involved or mentioned by name in any of the legal proceedings. Lawyers for the Nelsons say the government has not identified Amy Nelson as a target or subject of the FBI investigation.

The Feb. 17 filing formally opposes a motion by the federal government to delay, for six months, court proceedings related to the seizure of the Nelsons’ bank accounts. Those seizures now amount to $633,916 after deducting money set aside for lawyers’ fees in the case.

“Based on the Government’s own representations, $475,892 of that money are not even purported fraud proceeds, but were seized because of potential commingling with money that the Nelsons earned from their jobs or investments,” lawyers for the Nelsons say in the filing.

Citing a delay in grand jury proceedings due to the COVID-19 pandemic, the Department of Justice asked the court on Feb. 3 to pause the civil forfeiture case. Justice Department attorneys referenced a sealed declaration in which an FBI special agent indicated that the normal process of discovery in the forfeiture case “would have an adverse impact on a pending criminal investigation,” as the DOJ filing explained it, by publicly disclosing sensitive information.

“No indictment has been issued at this point, but the case is actively proceeding,” lawyers for the government wrote in the filing,” adding that “not all who may be implicated are aware that they are subjects of the investigation.”

In response, lawyers for Amy and Carl Nelson say in the filing that key details of the case have already been made public through Amazon’s lawsuit and news reports, citing reporting for GeekWire by journalist Levi Pulkkinen. The volume of publicly available information renders the government’s concerns largely moot or easily handled with customary redactions, they assert.

“We look forward to the opportunity to litigate the case and seek the return of the Nelsons’ money,” said Suneeta Hazra, a lawyer for the Nelsons, a partner at law firm Arnold & Porter in Denver and former chief of the Criminal Division in the U.S. Attorney’s Office for the District of Colorado.

In the meantime, the filing says, the seizure of the funds is having “a profound effect” on the Nelsons. They sold their Seattle home for $1.3 million in January, according to King County property records. They have been unable to pay their 2019 income tax bill, because the $125,000 they set aside for the purpose has been seized, according to the court filing.

In addition, the filing notes that “the extensive publicity regarding the proceedings involving Amazon and this forfeiture complaint has compromised the ability of both Mr. and Mrs. Nelson to earn a living and care for their large, young family.”

Rather than requesting a stay after starting the forfeiture case, they say, the government could have originally asked for a continuance, giving it more time to file the case in the first place.

“Here, it chose not to do so despite the incredibly harmful effect its naming of Amy Nelson in the caption of the complaint would have on her business and reputation,” the filing says. “Having made that choice, without consulting with the Nelsons’ attorneys or Mr. Nelson, the relief the Government seeks would give Mrs. Nelson no avenue to obtain even a scintilla of information to which she is entitled to under the discovery rules.”

The filing also provides details on how the criminal investigation has unfolded. It says Carl Nelson first learned about it on April 2, 2020, “when FBI agents arrived unannounced at his house in Seattle, in the middle of the pandemic, and informed him that he is the target of a federal investigation in the Eastern District of Virginia.”

The funds were seized on May 22, 2020, from six of the Nelsons’ bank accounts, the filing says.

“On June 5, the FBI again showed up unannounced to search the Nelsons’ home in the presence of Mr. Nelson, his wife, and their four daughters — then ages 5, 3, 2, and 9 months,” the filing says. “They stayed for less than an hour, during which they seized Mr. Nelson’s mobile phone, laptop, and various paper documents.”

For friends of Amy Nelson and members of the Seattle tech community who have closely followed her entrepreneurial journey, details of the investigation and suit against her husband have shed new light on what she has been experiencing in the past year, helping to fill in the gaps left by social media posts in which she alluded to the legal entanglements.

“There is no advice I could have given myself a year ago because, like, you couldn’t make this year up,” she wrote in an Instagram post in December. “Your business has an amazing team of 100 and is growing 20% month over month? You own the home you worked years to buy? Your husband has a successful consulting business? Your kids go to school? You are not currently mired in legal hell? It’s going to look really different in 12 months. Buckle up.”

Amazon alleges in court filings that Carl Nelson and his former Amazon real estate colleague, Casey Kirschner, engaged in outright fraud, not a side business, in receiving millions in payments from the real estate developer, Northstar Commercial Partners.

Northstar and its CEO Brian Watson “obtained all of their business with us by fraud, and specifically by paying bribes and kickbacks to corrupt insiders within our company,” said Elizabeth Papez, an attorney for Amazon, during a court hearing in January.

Carl Nelson has filed his own suit against Amazon in King County Superior Court in Seattle, alleging in part that the company has run afoul of Washington state’s new law restricting non-competition agreements. His attorneys claim Amazon violated his contract by suing him in federal court in Virginia rather than in Washington state court, the venue set in the agreement.

The latest filing by the Nelsons’ lawyers says that Amazon initially based its civil suit on an employment agreement signed by another Amazon employee, not Nelson, with “an entirely different employment contract with different terms regarding outside income.”

Amazon has since updated its complaint with the correct contract, but lawyers for the Nelsons assert in the filing that the company nonetheless “predicated a substantial portion of those initial allegations against Mr. Nelson — and presumably all of its initial discussions with the Government — on an employment contract that had nothing to (do) with him.”

The filing also offers a glimpse of Carl Nelson’s legal defense, noting that “Amazon has suggested Mr. Nelson’s actions constituted an undisclosed conflict of interest, which the Supreme Court has explicitly held does not qualify as honest services fraud,” which federal law defines as “a scheme or artifice to deprive another of the intangible right of honest services.”

In its earlier filing in the forfeiture case, the government said that the seized funds represented proceeds not just from alleged honest-services wire fraud or a conspiracy to commit fraud, but also from alleged money laundering or unlawful monetary transactions.

Source link

About admin

Check Also

Providence-backed Kno2 raises $15M for healthcare communicat…

Kno2 CEO Jon Elwell. (Kno2 Photo) Kno2, a Boise, Idaho-based startup developing ways for healthcare ...

Leave a Reply

Your email address will not be published. Required fields are marked *