ATLANTA - A New York man has been sentenced to more than seven years in federal prison for defrauding hundreds of investors out of nearly $63 million, including funds intended for a major commercial real estate project in Atlanta.
What we know:
Elchonon "Elie" Schwartz, 46, was sentenced on May 19 by U.S. District Judge Steven D. Grimberg to 87 months in prison, followed by three years of supervised release. Schwartz was also ordered to pay over $45 million in restitution after pleading guilty to one count of wire fraud earlier this year.
"Schwartz’s greed was boundless," said U.S. Attorney Theodore S. Hertzberg. "He callously abused the trust of hundreds of investors to line his own bank accounts, purchase expensive watches, and buy additional luxury items. Schwartz’s sentence reflects our office’s commitment to hold fraudsters accountable for exploiting investors who innocently rely on their false representations."
What they're saying:
Prosecutors say Schwartz raised approximately $62.8 million from more than 800 investors through the crowdfunding platform CrowdStreet Marketplace. The bulk of those funds—around $54 million—was earmarked for the Atlanta Financial Center, a planned large-scale commercial real estate complex. Another $9 million was raised for a mixed-use development in Miami Beach.
According to court documents, Schwartz assured investors their money would be held in separate bank accounts, not commingled, and used solely for the advertised development projects. Instead, investigators say he transferred the funds into personal and unrelated business accounts.
Schwartz allegedly used investor money to purchase luxury watches, invest in stocks and options, cover unrelated payroll expenses, and fund other business ventures. His fraudulent activity ultimately led to bankruptcy filings for the corporate entities tied to the CrowdStreet investments in July 2023.
The case was investigated by the Federal Bureau of Investigation with assistance from the Securities and Exchange Commission. It was prosecuted by Assistant U.S. Attorney Kelly K. Connors and Trial Attorney Matthew F. Sullivan of the DOJ’s Criminal Division. Former Assistant U.S. Attorneys David O’Neal and Christopher Huber also contributed to the case.