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Nightingale’s Elie Schwartz to face federal criminal charges

CEO accused of misappropriating $54M from crowdfunding investors has day in court

Nightingale Properties CEO Faces Arraignment by Feds
Elie Schwartz (LinkedIn, Getty)

Details on a Department of Justice probe into Elie Schwartz are set to come to light as the Nightingale Properties CEO faces an arraignment next week.

Federal criminal charges brought by the DOJ are expected to be presented in U.S. District Court for the Northern District of Georgia on Dec. 4, Bisnow reported. The outlet cited confirmation of the news from U.S. Magistrate Judge Regina Cannon but did not provide specifics on the charges.

The Justice Department and Schwartz did not respond to Bisnow’s requests for comment, while the U.S. Attorney’s office declined comment to the publication.

Commercial real estate investing platform CrowdStreet said in a post on its website that it views the arraignment as “a critical step forward in holding accountable those who engaged in fraudulent activity.”

Last year CrowdStreet alleged Schwartz swindled some $54 million from investors who thought they were helping his Nightingale Properties raise money to acquire an office in Atlanta’s Buckhead neighborhood and renovate a Miami Beach office building.

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CrowdStreet had failed to require the funds raised to be placed in an escrow account and millions of dollars would later be unaccounted for. That development triggered CrowdStreet’s appointment of an independent fiduciary to help recover the missing money.

Last October Schwartz reached a settlement with investors to make $4 million quarterly payments but has so far made good on one and missed on the second. Nightingale has defaulted on multiple loans.

“Our focus remains on protecting and restoring investor trust,” CrowdStreet said on its website regarding the arraignment. “We will continue to advocate for accountability and fairness, recognizing that this journey is far from over.”

Kari Hamanaka

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