Nightingale Properties CEO Elie Schwartz has been sentenced to 87 months in prison after orchestrating the biggest fraud in real estate crowdfunding history.
District Judge Steven Grimberg of the Northern District of Georgia handed down the sentence, which includes three years of supervised probation, in an Atlanta courthouse Monday afternoon.
Bisnow
Schwartz, the Brooklyn-born real estate investor, had more than a dozen supporters in the courtroom, who let out a gasp when Grimberg issued the seven-year, three-month sentence.
He wasn’t immediately taken into custody. Grimberg said he would set a date when Schwartz would have to report to prison, and he agreed to try to assign Schwartz to a penitentiary near his family in New York.
Schwartz raised $63M on the CrowdStreet platform in 2022 for two real estate deals but admitted to diverting roughly $54M of that total to spend on luxury watches, art, a Miami condo and covering payroll at his other properties.
He pleaded guilty to one count of wire fraud in February. Before the hearing, he wrote a letter to the court expressing remorse, saying that he “learned a valuable lesson” and won’t put himself in a position to manage other people’s money again.
Prosecutors recommended a sentence of roughly seven years, less than half of the maximum 20 years, citing Schwartz’s cooperation and lack of a criminal history. More than a dozen of his victims told Bisnow this month that they were disappointed in the Department of Justice’s recommended sentence.
This is a developing story.