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Written by: E. George
Published May 27, 2025 @ 12:02 PM ET
FULTON COUNTY, Ga. – The founder of a commercial real estate investment firm has been sentenced to 87 months in prison and ordered to pay $45 million in restitution after defrauding hundreds of investors in a scheme involving commercial real estate projects in Georgia and Florida.
Elchonon “Elie” Schwartz, 46, of New York City, was convicted after pleading guilty to one count of wire fraud in February. Schwartz raised nearly $63 million through an online crowdfunding platform, CrowdStreet, with promises to invest the funds in two major commercial real estate projects—$54 million for the Atlanta Financial Center in Buckhead and $9 million for a mixed-use building in Miami Beach.
Instead of using the funds as promised, Schwartz diverted the investor money into his personal accounts. Court records show that he used the money for personal expenses, including purchasing luxury items like watches and funding stock market investments. Schwartz also misappropriated the funds to cover payroll for unrelated commercial real estate ventures he controlled.
The fraudulent activity was discovered when the two companies Schwartz formed to manage the investments filed for bankruptcy in mid-2023. At the time, the companies could not account for the missing funds. With assistance from the U.S. Securities and Exchange Commission (SEC), the FBI led the investigation into Schwartz’s actions.
Prosecutors emphasized that Schwartz’s actions demonstrated an utter disregard for the investors who trusted him with their money. He falsely assured investors that their funds would be held in segregated accounts, separate from his personal use, and solely for the purposes of funding the commercial properties. Instead, he exploited their trust for his own financial gain.
U.S. Attorney Theodore S. Hertzberg described Schwartz’s behavior as greed without bounds, noting that his actions led to significant financial harm for over 800 victims. Schwartz’s sentence, which includes three years of supervised release following his prison term, sends a strong message about the legal consequences of fraudulent activity in investment schemes.
Special Agent Paul Brown of the FBI’s Atlanta Field Office added that the sentencing reflects the commitment of law enforcement to hold those who exploit investors accountable.
Schwartz’s case highlights the risks associated with crowdfunding platforms and the potential for exploitation in the real estate investment sector. Investigators have urged the public to exercise caution and conduct thorough due diligence before committing funds to such projects.
The FBI and the SEC’s Division of Enforcement collaborated on the investigation. Assistant U.S. Attorney Kelly Connors and Trial Attorney Matthew F. Sullivan led the prosecution of Schwartz.
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