Elchonon "Elie" Schwartz pleaded guilty to wire fraud charges related to a $62.8 million investment fraud scheme in Atlanta. Schwartz, who led a commercial real estate investment firm, misled over 800 investors who expected returns from projects like the Atlanta Financial Center and Lincoln Place in Miami Beach, Florida, according to a release from the U.S. Attorney’s Office for the Northern District of Georgia.
Acting U.S. Attorney Richard S. Moultrie, Jr. explained that Schwartz's goal was to inflate his personal wealth and acquire luxury items. He said, "This office is committed to protecting investors from individuals, like Schwartz, who defraud donors out of their hard-earned money and seek to prioritize their own greed at the expense of legitimate investors," in the same release. Despite agreements with CrowdStreet to keep investor funds safe in separate accounts, Schwartz transferred nearly all of the raised funds into his own accounts between June 2022 and June 2023.
Sean Burke, Acting Special Agent in Charge of FBI Atlanta, said the fraud was a result of greed and would have serious consequences. Schwartz used the CrowdStreet platform to raise funds, collecting about $54 million for the Atlanta project from 654 investors, and $8.8 million for the Miami Beach project from 167 investors.
Schwartz, 46, from New York, faces up to 20 years in prison for wire fraud. His sentencing is scheduled for May 19, according to the U.S. Attorney’s Office. The investor funds were misused for personal purchases like luxury watches and were also invested in stocks and options through Schwartz's brokerage account, leading to the companies filing for Chapter 11 bankruptcy in July 2023.
The FBI is continuing to investigate the case, with support from the Securities and Exchange Commission's Division of Enforcement. Assistant U.S. Attorney Kelly K. Connors and Trial Attorney Matthew F. Sullivan are leading the prosecution, with help from former Assistant U.S. Attorneys David O'Neal and Christopher Huber.
