A New York real estate investor has pleaded guilty to wire fraud in a $62.8 million investment fraud scheme involving commercial properties in Atlanta and Miami Beach.
According to updates provided by Department of Justice, Elchonon “Elie” Schwartz, 46, admitted in the Northern District of Georgia that he misappropriated investor funds raised through CrowdStreet Marketplace, a real estate crowdfunding platform.
Fraudulent Investment Scheme
Schwartz solicited investments for:
- A commercial real estate complex in Atlanta (May 2022), raising $54 million from 654 investors.
- A mixed-use building in Miami Beach (November 2022), raising $8.8 million from 167 investors.
Schwartz told investors that funds would be held in segregated accounts and used solely for real estate investments. However, he misused the money, funneling it into personal accounts, stock market trades, luxury watches, and payroll for unrelated businesses.
In July 2023, the two corporate entities Schwartz created for the investments filed for Chapter 11 bankruptcy.
Legal Consequences
Schwartz pleaded guilty to one count of wire fraud and faces a maximum sentence of 20 years in federal prison. His sentencing is scheduled for May 19.
A federal judge will determine the sentence based on U.S. Sentencing Guidelines and statutory factors.
Investigation & Prosecution
The case was investigated by the FBI Atlanta Field Office, with assistance from the SEC’s Division of Enforcement.
Prosecutors:
- Matthew F. Sullivan, Criminal Division’s Fraud Section
- Kelly Connors, Assistant U.S. Attorney, Northern District of Georgia
Former Assistant U.S. Attorneys David O’Neal and Christopher Huber also contributed to the investigation.
