Elie Schwartz, 46, a New York-based commercial real estate investor, pleaded guilty to wire fraud after he misappropriated approximately $62.8 million in investor funds raised through the CrowdStreet Marketplace for two development projects. The U.S. Attorney’s Office for the Northern District of Georgia announced the guilty plea on Wednesday.
In May 2022, Schwartz began soliciting investments for the Atlanta Financial Center project in Atlanta, raising about $54 million from 654 investors. Later that year, in November 2022, he sought additional investments for Lincoln Place, a mixed-use development in Miami Beach, raising approximately $8.8 million from 167 investors.
Investors’ funds were deposited into segregated accounts, with agreements stipulating that the funds would be used solely for the respective properties and not commingled. However, before either project closed, Schwartz transferred nearly all of the $62.8 million into his personal and unrelated business accounts. He used these funds to cover payroll for his businesses, purchase luxury watches, and invest in stocks and options.
In mid-July 2023, the corporate entities for both projects filed for Chapter 11 bankruptcy, signaling financial collapse.
Acting U.S. Attorney Richard S. Moultrie Jr. stated, “Schwartz betrayed hundreds of investors who trusted him to handle their funds responsibly. Instead, he prioritized his own greed, spending investors’ hard-earned money on luxury items.”
Schwartz faces up to 20 years in prison, with sentencing set for May 19, 2025. His conviction highlights ongoing efforts by the U.S. Attorney’s Office to protect investors from fraudulent schemes.
