Imagine being handed what looks like a golden ticket to commercial real estate riches—only to discover it was all smoke and mirrors.
That’s the reality hundreds of investors faced when a New York businessman’s crowdfunding pitch spiraled into a multimillion‑dollar fraud.
The Scheme That Sounded Too Good to Be True
Starting in May 2022, Elchonon “Elie” Schwartz, 46, promised investors on the CrowdStreet Marketplace an opportunity to back two big projects: a sprawling commercial complex in Atlanta and a stylish mixed‑use building in Miami Beach.
He touted segregated bank accounts, strict use of funds for property development, and airtight bookkeeping.
Investors poured in more than $62.8 million—about $54 million earmarked for Atlanta and $8.8 million for Miami Beach—confident their money was locked down for real estate deals.
Funds Diverted to Luxury Purchases and Personal Accounts
Behind the scenes, however, Schwartz was siphoning nearly every dollar into his personal bank and brokerage accounts.
Instead of laying bricks and mortar, he splurged on luxury watches, piled into risky stock and option trades, and even covered payroll for other, unrelated real estate ventures he controlled.
By July 2023, the two entities set up to receive investors’ cash collapsed into Chapter 11 bankruptcy.
A Federal Judge Delivers a Harsh Sentence
On May 19, 2025, a federal court in Atlanta laid down a stern warning: Schwartz was sentenced to 87 months (over seven years) in prison and hit with more than $45 million in restitution.
“This defendant made fraudulent representations to investors and misappropriated their money to buy luxury watches and deposit into his brokerage and bank accounts,” declared Matthew R. Galeotti, Head of the Criminal Division.
“We remain dedicated to prosecuting fraudsters who steal investors’ hard‑earned savings to the fullest extent of the law.”
Prosecutors Condemn the “Boundless” Greed
U.S. Attorney Theodore S. Hertzberg minced no words: “Schwartz’s greed was boundless.
He callously abused the trust of hundreds of investors.”
His office emphasized that swindling people who “innocently rely on false representations” would not go unpunished.
Paul Brown, Special Agent in Charge of the FBI Atlanta Field Office, added that holding such criminals accountable is crucial to deliver justice for the victims.
Guilty Plea and Collaborative Investigation
Schwartz admitted his guilt in February 2025, pleading guilty to one count of wire fraud.
The FBI’s Atlanta Field Office led the investigation, with key support from the SEC’s Division of Enforcement.
Trial Attorney Matthew F. Sullivan and Assistant U.S. Attorney Kelly Connors prosecuted the case, underscoring the Justice Department’s commitment to cracking down on white‑collar crime.