Elchonon “Elie” Schwartz, the former head of a commercial real estate investment firm, has been sentenced to over seven years in federal prison for defrauding investors out of $62.8 million. Details released by the U.S. Department of Justice reveal that Schwartz, who ran an elaborate scheme through the crowdfunding site CrowdStreet Marketplace, convinced more than 800 investors to pour money into what was promised to be a prosperous commercial complex in Atlanta.
According to a statement from the U.S Attorney’s Office, Schwartz was adept at painting a picture of meticulous money management; assuring investors that their funds would be kept in segregated bank accounts and not misused. Yet, instead of channeling these funds into intended real estate projects, he funneled virtually all of it into personal accounts and even used them to buy luxury items.
The deception spun by Schwartz unfolded over the course of a year, beginning in May 2022. This gross manipulation of trust resulted in significant financial losses for the investors and eventually led to the bankruptcy of two corporate entities associated with the scheme in mid-July 2023. U.S. Attorney Theodore S. Hertzberg was unflinching in his denouncement, stating “Schwartz’s greed was boundless,” and that he “callously abused the trust of hundreds of investors to line his own bank accounts, purchase expensive watches, and buy additional luxury items.”
On May 19, 2025, U.S. District Judge Steven D. Grimberg delivered Schwartz’s sentence: 87 months in prison followed by three years of supervised release, with a restitution payment of over $45 million demanded. His conviction, the result of a guilty plea to one count of wire fraud earlier in February, comes as a small salve to the substantial financial wounds inflicted upon so many.
This case was a cooperative effort between the FBI and the SEC’s Division of Enforcement. Assistant U.S. Attorney Kelly K. Connors and Trial Attorney Matthew F. Sullivan led the prosecution, with former Assistant U.S. Attorneys David O’Neal and Christopher Huber also playing significant roles in the investigation and prosecution phases.
