Head of real estate investment firm sentenced in over $60M Atlanta, Miami fraud scheme

WASHINGTON, D.C. (Atlanta News First) – The head of a real estate investment firm has been sentenced and ordered to pay fines for his role in a fraud scheme that targeted investors in two major United States cities, according to the FBI.

Elchonon “Elie” Schwartz, 46, of New York was sentenced to 87 months in prison and ordered to pay over $45 million in restitution for defrauding commercial real estate investors in Atlanta and Miami.

He was sentenced in the Northern District of Georgia on Monday.

Court documents show that starting in May 2022, Schwartz produced the scheme through the crowdfunding investment website CrowdStreet Market, where it managed to raise over $62.8 million from hundreds of investors, including about $54 million for a large complex in Atlanta.

Schwartz also used the website to get about $8.8 million from investors for a mixed-use building in Miami Beach.

According to the FBI, Schwartz told investors that he would secure their funds in separate bank accounts and only use the money to fund each property.

However, FBI officials said he put the investor money into his personal bank account, personal brokerage account and accounts not related to the investments, and used the money to buy luxury watches, invest in stocks and options and cover payroll expenses not connected to the investments.

In July 2023, the two corporations Schwartz created to receive funds filed for Chapter 11 bankruptcy.

Schwartz pleaded guilty to one count of wire fraud in February.

“Schwartz’s greed was boundless,” said U.S. Attorney Theodore S. Hertzberg for the Northern District of Georgia. “Schwartz’s sentence reflects our office’s commitment to hold fraudsters accountable for exploiting investors who innocently rely on their false representations.”

The FBI Atlanta Field Office investigated the case.

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