‘Psychological Torture’: The Alleged Extortion of a Venture Capitalist

(Bloomberg) -- Last November, the U.S. Attorney in Missoula, Montana, indicted a 56-year-old man named Bryan Nash on 10 charges of stalking and extortion. Agents from the Federal Bureau of Investigation had gathered evidence they said showed that Nash sent hundreds of messages threatening recipients and their immediate families with public humiliation, veiled threats of violence and criminal prosecution. The indictment passed mostly unnoticed, but hundreds of miles away, some of Silicon Valley’s most powerful leaders exhaled. For more than a decade, in some cases, prosecutors say the alleged targets and their families had endured Nash’s threats to publicize unsubstantiated claims of illicit affairs, sex trafficking, pedophilia, and the hiring of prostitutes unless they paid him millions of dollars.

The alleged victims weren’t identified in the indictment, but Bloomberg has learned that they include former Sequoia Capital partner Michael Goguen, current partner Doug Leone, the venture firm itself and several of its senior partners, as well as Kleiner Perkins Chairman John Doerr. In all, according to the criminal complaint, the accused sent threatening messages to almost two dozen people, including children, wives, ex-wives, ex-girlfriends, employees, friends, religious leaders and charities. The trial is set for May 11. Nash, who has pleaded not guilty and denies all the charges, could face up to seven years in prison and $500,000 in fines if convicted.

There is no evidence that Nash’s targets actually engaged in the behavior of which he allegedly accused them. But in an era of fake news and the #MeToo movement, his threats were enough to inspire fear that his claims would be believed. The story, told here for the first time, is based on court documents, texts and emails reviewed by Bloomberg and interviews with almost a dozen people who said they are familiar with the alleged harassment. It involves a former stripper, an early Google executive, secret audio recordings, $40,000 in fantasy art, security guards on Sand Hill Road, a sex trafficking scare, forged medical documents and intermittent demands for tens of millions of dollars. Nash and his public defender, John Rhodes, didn’t respond to several requests for comment. In an interview, Goguen described the alleged harassment and extortion as “psychological torture.”

A Relationship Turns Toxic

Bryan Nash and Michael Goguen started out as casual workout buddies, their relationship turning toxic over the years as their lives and careers diverged. While Goguen reaped the riches and rewards of the tech boom, Nash struggled to keep up—piling on debt and trying fruitlessly to break into the rarefied world of Silicon Valley venture capitalists. 

The two men met in the early 1990s. Grunge music was on the radio, Google had not yet been invented, and a three-bedroom house down the street from Stanford University cost less than $1 million. They attended the same gym and hit it off despite hailing from different backgrounds. Goguen, then 27, had just relocated from Boston with his wife Lynne to work at Digital Equipment Corp. while earning his master’s in electrical engineering at Stanford. Nash, then 28, was a valley native, single and finding some success trading stocks. He had something of an inside track to the upcoming boom times; his stepfather, Donald Bell, founded Bell Microsystems and was close with Sequoia Capital founder Don Valentine. Goguen grew up in Bedford, Massachusetts, the son of an accountant and the fifth of six kids.

Where Goguen could be introverted, Nash was more charismatic and outgoing—frequently throwing parties at his home. As they built careers and started families during their 30s, Goguen and Nash remained friendly but spent less time socializing. Nash was doing work for the hedge fund Bowman Capital and some financial consulting. He married his girlfriend Stephanie Hartranft. They had three children together and purchased their dream home a few miles from Stanford in the coveted Woodside Elementary School District, where Nash himself had attended school.

Goguen joined Sequoia Capital as a venture investor in 1996. Already famous for its bets on Apple Inc. and other startups that grew to become global titans, the firm was becoming a gold standard. Goguen put his electrical engineering degree to work, finding and funding infrastructure and networking startups—making money for the firm and himself in the process.

By the early aughts, Goguen was entering a period of prosperity. Sequoia’s small investment in Google ballooned in value as the search engine began to dominate the web and digital advertising. Goguen got a share of that deal and dozens of other home runs. His net worth soared, and he frequently appeared on the Forbes Midas List for his ability to find and fund winning technologies.

As Goguen’s career took off, his personal life cratered. He and his wife Lynne, who had two children together, divorced in 1999. He married his second wife Melinda in 2000 and began traveling frequently for both business and pleasure. In 2002, he met a woman named Amber Baptiste at a Dallas strip club where she was working at the time. Goguen and the 21-year-old Baptiste began a long-distance, intermittent affair, both recalled in interviews.

In 2008, Bryan and Stephanie Nash split up and filed for divorce, too. By then, the couple had begun to struggle financially and couldn’t afford the $12,800 monthly outlay for the mortgages and lines of credit on the family’s $2.2 million house in Woodside and the $825,000 second home in Tahoe, according to the divorce documents.

One day, according to documents related to the divorce, Stephanie Nash called Goguen, who was by then sharing child custody with his first wife, recovering from his second divorce and dating his future third wife. Goguen was surprised to hear from Stephanie Nash because they hadn’t been close. She wanted help finding a job and navigating her split from Bryan. Goguen said he gave Stephanie advice along with a laptop and the name of a divorce lawyer. Bryan Nash was furious that Goguen had gotten involved, according to the criminal complaint. Nash, the authorities say, began berating his erstwhile friend by email and threatening to expose Goguen’s affairs and other unspecified behavior unless he paid Nash to stay quiet.

As Nash’s financial situation worsened, he and his wife were forced to sell their Woodside home for $1.75 million after a series of price reductions. By then, Nash’s threatening emails are alleged to have intensified, prompting Goguen to contact the San Mateo County Sheriff’s Office. The content and timing of the missives were often upsetting and false, Goguen said; one text accusing him of sleeping with Nash’s wife arrived as Goguen’s first son was being born. But no laws were being broken, Goguen recalls local law enforcement telling him at the time. A spokeswoman for the county sheriff’s office declined to comment, citing the upcoming federal trial.  

A Second Extortion Attempt

Three years later, Nash was still demanding money from Goguen and threatening to expose his affairs to colleagues and friends in Whitefish, Montana, where Goguen had a second home, according to the criminal complaint. Then, even as Goguen said he struggled to deal with Nash’s extortion attempt, a second one emerged. Amber Baptiste, the exotic dancer Goguen had met years earlier in Dallas and still saw occasionally, was angry because he kept remarrying, but never to her. She began sending messages disparaging Goguen and the multiple women with whom he had had intimate relationships, according to texts and emails reviewed by Bloomberg. She urged him to spend time with her and donate to her charity, Every Girl Counts, which she told Goguen had been set up to clothe, feed and shelter three-dozen young girls in Los Angeles she said had been abused and neglected. Goguen donated $250,000. 

In January 2014, Baptiste produced medical documents showing she had a high-risk strain of the human papillomavirus (HPV) and said she had contracted it from Goguen. She demanded $40 million in compensation, and Goguen, believing the claim to be true and fearing damage to his reputation, signed an agreement to make four $10 million payments, wiring her the first installment in January 2014.

At about this time, Baptiste said she began receiving anonymous messages filled with damaging accusations about Goguen. Based on the language, timing and other factors, Goguen and others suspect that Nash was sending the messages. She demanded that Goguen pay the remaining $30 million sooner and threatened to destroy his reputation if he didn’t, according to court documents. Goguen didn’t, and in March 2016, Baptiste filed a now infamous lawsuit alleging, among other things, that he had kept her as a sex slave and had given her HPV. Years later, evidence presented at trial would persuade a judge that none of the allegations were true—that Baptiste had forged medical documents, created a fake charity and spent more than $40,000 of the charity’s funds to commission fantasy paintings of herself. (In late December 2019, the court ordered Baptiste to repay Goguen the $10.25 million. She told Bloomberg in February that she isn’t currently represented by an attorney but plans to appeal.) 

But at the time, her claims resonated in the court of public opinion—generating global headlines, inspiring a YouTube animation of Goguen having sex with a unicorn and shattering Goguen’s family and career. His oldest daughter took a leave of absence from university while a younger daughter stopped talking to him, according to court documents. Sequoia Capital, already being criticized for failing to have a single female investor in the U.S., cut all ties to Goguen. Within hours of the news breaking, the firm had scrubbed all mention of Goguen from the website and began seeking replacements for him on a dozen boards. “I was shell-shocked,” Goguen later told Bloomberg. “My name and picture were everywhere for doing the worst things, and it was all untrue.” 

Secret Recordings

Nash stepped up his harassment and began threatening to reveal unspecified secrets unless Goguen paid him $15 million, according to the criminal complaint. Before long, Goguen felt he had evidence of extortion. The county sheriff’s office directed him to tell Nash he’d meet to strike a deal. Goguen secretly recorded their conversation, but the noisy restaurant made the result inaudible. So Goguen and Nash met again, this time at the office of a Redwood City, California-based attorney Nash had retained. Using a device taped inside his shirt cuff, Goguen said he recorded a conversation, during which he agreed to pay Nash $15 million if he agreed not to publicize what Goguen said were false claims. The county sheriff’s office raided Nash’s home in April 2016, seizing computers, paperwork and guns, according to documents related to the Nash divorce. 

In November 2017, Nash filed a lawsuit against Goguen alleging breach of contract for failing to pay the agreed-upon $15 million.  When it was revealed that the offer was extended at the direction of law enforcement as part of a sting, the judge dismissed the suit with prejudice.

Nash didn’t give up, according to the FBI indictment. While escalating the pressure on Goguen with harassing messages to his children, wife, ex-wives, ex-girlfriends, work associates, church pastor, charity boards and others alleging vile behavior, he also expanded his targets, according to the FBI complaint. This time, he approached people with even deeper pockets, according to the complaint.

Sequoia knew Nash. He had contacted the firm’s partners periodically over the years for personal and professional reasons. Shortly after Goguen was forced out, Nash contacted Doug Leone and Chris Cooper, then the chief financial officer, requesting a meeting. They met, and Leone and Cooper “quickly determined they would never hire him,” according to the complaint. After a few brief follow-up conversations with Nash, Sequoia retained outside counsel to handle future communications and serve as a buffer. Nash continued to contact Sequoia, and the firm hired an undercover security guard to sit in the reception area and take action if problems arose, according to people familiar with the situation.

“Bryan Nash was relentless in his threats to spread a wide range of baseless allegations and false rumors about Sequoia and multiple partners,” said a Sequoia spokeswoman. “We believe these efforts were not limited to Sequoia.”

The MeToo Movement

Nash’s alleged extortion coincided with the emergence of the #MeToo movement. Women who had been sexually harassed and assaulted by powerful men began speaking out. In Silicon Valley, where roughly 90% of venture investors were men, the mood was especially tense. Many wondered whether they or a colleague would be the next to fall.

The steady stream of headlines detailing bad behavior by some of the nation’s most powerful men continued through 2018 and 2019. Against that backdrop, Nash continued sending messages to Sequoia and Kleiner Perkins. In one email addressed to John Doerr, he alleged another Kleiner employee had an affair with Goguen. Nash also suggested Doerr keep the information “confidential” as he’d hate to see Kleiner “dragged into this news cycle” after the firm’s last “bump,” a reference to the widely covered sexual discrimination lawsuit filed by former partner Ellen Pao. A spokeswoman for Kleiner said Doerr didn’t read the email and declined further comment.

In July 2018, Nash sent an email claiming to have the tail number of Leone’s plane as well as his home address and details about his family. He messaged Leone again claiming a woman had implicated him in an incident he declined to specify and said another women claimed he was “doing bad things too,” according to the FBI complaint. Nash also wrote that Leone’s wife would soon find out about his alleged misbehavior as he was planning to file a lawsuit and was meeting with specific reporters and publications. The threats were interspersed with settlement demands and requests to meet. After a series of self-imposed deadlines to meet and settle with Sequoia had passed, Nash emailed the firm suggesting it set up a $100 million victim’s fund, from which Nash would collect a 30% administration fee. Sequoia reported Nash’s behavior to the San Mateo Sheriff’s Office, to no effect. Through a spokeswoman Leone declined to comment about his experience or that of the firm. The sheriff’s office declined to comment. 

Federal and local law enforcement continued to receive complaints both about Nash and from him about Goguen. Nash told FBI agents Goguen had drugged, raped or killed at least two women—allegations the FBI investigated and determined were without merit, according to the FBI criminal indictment. Eventually, federal authorities decided they had enough evidence to charge Nash, who is now living in Redwood City near many of his alleged targets.

Twelve years after Nash’s campaign of harassment is said to have begun, his alleged victims remain on edge. Goguen and others employ guards and installed security cameras to protect them at home and work. Even now a plain-clothes security man maintains a low-key presence in the Sequoia lobby. One of the alleged targets reported having nightmares and losing significant sleep, according to the complaint, while another was forced to go on anxiety medication. Other alleged targets told the FBI they live in constant fear that, even though false, Nash’s allegations against them would cause the loss of their reputations, businesses and, in many cases, their families. Said one alleged victim in an interview: “He’s the enemy you never want to have.”

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net, Mark Milian

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