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In a new lawsuit, attorneys for Seattle entrepreneur Amy Nelson and her husband allege that their salary and income are being falsely held by the government in connection with the FBI’s seizure of more than $ 892,000 from their bank accounts last year.
The case is one of several disputes arising from allegations that Nelson’s husband, former Amazon transaction manager Carl Nelson, partnered with a colleague and others to receive millions of dollars in setbacks in return for forwarding Data center deals from Amazon Web Services to a Real, Colorado real estate developer, as detailed in a GeekWire story last week.
Carl Nelson denies claims that he and an employee tricked Amazon into working with the developer in exchange for bribes. His lawyers say his Amazon employment contract gave him broad outside work allowances to do business with Amazon customers and customers.
In addition to being a defendant in a civil lawsuit filed by Amazon, Carl Nelson is also the subject of a criminal investigation by the FBI, according to court records.
Amy Nelson, CEO of The Riveter. (Rivet photo)
Amy Nelson is the CEO and founder of The Riveter’s startup and women’s network, which raised nearly $ 20 million in funding and plans to open up to 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 lawsuit. The riveter himself is not involved in any of the legal proceedings or is mentioned by name. Nelsons lawyers say the government has not identified Amy Nelson as a target or subject of the FBI investigation.
The February 17 filing formally contradicts a motion by the federal government to postpone legal proceedings related to the confiscation of the Nelsons’ bank accounts for six months. These seizures now total $ 633,916 after deducting the money earmarked for attorney fees in this case.
“Based on the government’s own account, $ 475,892 of that money is not even alleged fraudulent proceeds, but was confiscated because it may have mixed up with money the Nelsons made from their jobs or investments,” Nelsons lawyers say in the File.
Citing a delay in the grand jury’s proceedings due to the COVID-19 pandemic, the Department of Justice asked the court on February 3 to suspend civil forfeiture. Justice Department attorneys referred to a sealed statement in which an FBI agent advised that the normal discovery process in the event of forfeiture would “have a negative impact on a pending criminal investigation,” the DOJ filing stated by disclosing confidential information publicly announced.
“At this point, no charges have been made, but the case is actively being pursued,” the government lawyers wrote on the file. “Not all those affected know that they are the subject of the investigation.”
In response, Amy’s and Carl Nelson’s attorneys said on the file that key details of the case had already been released through the lawsuit and news reports from Amazon, citing coverage by journalist Levi Pulkkinen for GeekWire. The volume of publicly available information makes government concerns largely controversial or easy to deal with ordinary editorial staff, they claim.
“We look forward to the opportunity to sue the case and request the return of the Nelsons money,” said Suneeta Hazra, attorney for the Nelsons, partner in the Denver law firm of Arnold & Porter and former chief of crime in Denver told the US attorney general for the Colorado District.
Meanwhile, the seizure of the funds has “profound effects” on the Nelsons. They sold their Seattle home for $ 1.3 million in January. They were unable to pay their 2019 income tax bill as the $ 125,000 they set aside for the purpose was confiscated, according to court records.
Additionally, the file states: “The extensive public relations work surrounding the litigation against Amazon and this foreclosure complaint has adversely affected Mr. and Mrs. Nelson’s ability to earn a living and provide for their large, young families.”
Instead of applying for a stay after the revocation process has started, the government could originally have asked for a continuation in order to have more time to file the case.
“Here she has chosen not to do so, despite the incredibly damaging impact the naming of Amy Nelson in the complaint heading would have on her business and reputation,” the file said. “If this decision had been made without consulting the Nelsons’ attorneys or Mr Nelson, the government’s intended relief would not give Ms. Nelson an opportunity to obtain even a scintilla of information to which she is entitled under the Discovery Rules. “
The filing also includes details of the progress of the criminal investigation. It is said that Carl Nelson first learned of this on April 2, 2020, “when FBI agents arrived unannounced at his Seattle home in the midst of the pandemic and informed him that he was the target of a federal investigation in the eastern district of Virginia. “
The funds were seized from six Nelsons bank accounts on May 22, 2020.
“On June 5, the FBI reappeared unannounced to ransack the Nelson’s home in the presence of Mr. Nelson, his wife and their four daughters – then aged 5, 3, 2 and 9 months,” the file said . “They stayed for less than an hour and then confiscated Nelson’s cell 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 lawsuit against her husband shed new light on what she witnessed over the past year and contributed to the Closing gaps left social media posts in which she alluded to the legal entanglements.
“There is no advice I could have given myself a year ago because you couldn’t catch up this year,” she wrote in an Instagram post in December. “Your company has an amazing team of 100 employees and is growing by 20% from month to month? Do you own the house you worked for for years? Does your husband have a successful consulting business? Do your children go to school? Not in legal hell right now? In 12 months it will be very different. Buckle up.”
One day I’ll tell the story of my 2020. You won’t believe it; Not me. My trust in institutions has been shaken. But I’m still here and now I can tell you what life is like in the middle of a 60 minute story or a long read. It’s whiplash + raw life + can’t wait for it to be over.
– Amy Sterner Nelson (@Amy_K_Nelson) December 23, 2020
Amazon claims in court records that Carl Nelson and his former real estate colleague at Amazon, Casey Kirschner, were involved in downright fraud, not a sideline, by receiving millions in payments from real estate developer Northstar Commercial Partners.
Northstar and its CEO Brian Watson “have done all of their business with us through fraud, and particularly by paying bribes and kickbacks to corrupt insiders at our company,” said Elizabeth Papez, an attorney for Amazon, during a January trial.
Carl Nelson has filed his own lawsuit against Amazon in the King County Superior Court in Seattle, alleging, in part, that the company violated Washington state’s new non-compete law. His attorneys claim Amazon breached his contract by suing him in federal court in Virginia, rather than the Washington jurisdiction set out in the agreement.
The latest filing by Nelsons attorneys states that Amazon initially based its civil action on an employment contract signed by another Amazon employee, not Nelson, with “an entirely different employment contract with different terms and conditions for external income.”
Amazon has since updated its complaint with the correct contract, but the Nelsons lawyers allege in the filing that the company nonetheless “predicted a substantial part of those initial allegations against Mr Nelson – and presumably all of his first talks with the government – on an employment contract that had nothing to do with him. “
The filing also provides a glimpse into Carl Nelson’s legal defense, noting that “Amazon has suggested that Mr. Nelson’s actions constitute an undisclosed conflict of interest that the Supreme Court has specifically identified as honest service fraud,” like that Federal law defines “a plan or contrivance to deprive another of the intangible right to honest services.”
In its previous forfeiture filing, the government stated that the seized funds represented revenue not only from suspected honest service fraud or a conspiracy to commit fraud, but also from suspected money laundering or unlawful monetary transactions.