Elchonon “Elie” Schwartz, the CEO of the commercial real estate investment firm Nightingale Properties, was sentenced to 87 months in prison for conducting a fraud scheme that siphoned $62.8 million from more than 800 investors.
Schwartz solicited investments through CrowdStreet Marketplace in connection with the Atlanta Financial Center, a large commercial real estate complex in Atlanta. Starting in May 2022, Schwartz raised approximately $54 million from approximately 654 investors for this venture.
Beginning in November 2022, Schwartz again solicited investments through CrowdStreet concerning Lincoln Place, a mixed-use building in Miami Beach, raising approximately $8.8 million from 167 investors. The CrowdStreet investor funds were deposited into a segregated bank account for each investment.
But before either the Atlanta Financial Center or Lincoln Place transaction closed, Schwartz misappropriated and converted CrowdStreet investor funds for his own use. Beginning in June 2022, and continuing through June 2023, Schwartz transferred nearly all of the raised funds out of the segregated bank accounts and into his personal bank account, personal brokerage account, and accounts for other unrelated commercial real estate investments that were either affiliated or controlled by him. Schwartz used these funds to cover payroll expenses for his commercial real estate businesses, purchase luxury watches, and invest in stocks and options in his brokerage account.
In mid-July 2023, the corporate entities that Schwartz formed to receive funds from CrowdStreet investors for their investments in the Atlanta Financial Center and Lincoln Place both filed for Chapter 11 bankruptcy.
Schwartz pleaded guilty in February to one count of wire fraud. In addition to his prison time, Schwartz was also sentenced to three years supervised probation.
District Judge Steven Grimberg of the Northern District of Georgia, who handed down the sentence, did not immediately set a date when Schwartz would have to report to prison.
Separate from his conviction, Schwartz also faces charges brought by the US Securities and Exchange Commission that he ran afoul of the Securities Act of 1933 and Securities Exchange Act of 1934.
Without question, he should be sentenced. But what sickens me to this day? Is it Bank of America Wells Fargo? Then a plethora of other banks.
Led by countrywide, home loans.
By two thousand seven destroyed the united states economy and dominoed the global economy. first time in history of the United States, we had a nationwide foreclosure moratorium, because the banksters, it’s defrauded millions of Americans out of their properties destroying their families. Et cetera, and yet, not one of those f******, spent one f****** minute in prison. i saw it at the time when Bernie Madoff went down that it was fascinating to me, because he had, in fact, included a whole lot of very wealthy, powerful people in this country. And his ponzi scheme and so he went to rot in prison, but the truth is his crimes. In comparison to what the mortgage industry banking industry did to this country and the global economy. Makes it look like he robbed a candy store and not one f*****. In any of these banks, step brought on a recession worse than the great depression, not once.But one hour in jail.
….. Why the truth is corruption? If you look at the stats of how many/what percentage of powerful White House administration folks end up working for the bankster,
sludge funds, etc, you’ll get the answer crystal clear CORRUPTION!
7.25 years in some Fed country club prison for ripping off millions of dollars from investors, significantly less with time off for good behavior. Bank robbers wish they had it so good.
Did I miss something? Where is the part about paying restitution?
Maybe “REGULATION” is not a bad thing. The book of banking ethics is filled with blank pages.