With a sentencing hearing approaching, Nightingale’s Elie Schwartz is finally telling his side of a sordid story that may soon land him in jail.
Schwartz’s public defender on Tuesday submitted a sentencing memorandum to the judge presiding over the disgraced Nightingale chief executive officer’s wire fraud case, Bisnow reported. The memorandum included a letter written by Schwartz, which was filed under seal, but excerpted in his attorney’s memorandum.
“I learned a valuable lesson about my vulnerability in controlling money under extreme circumstances, and now I am ensuring that no matter how much pressure I am under, I won’t have access to any funds,” Schwartz wrote. “In a way, I am protecting myself from myself.”
In February, Schwartz pleaded guilty to wire fraud for his role in a multimillion-dollar crowdfunding scandal. Roughly 800 investors sent Schwartz about $62.8 million for real estate investments that he diverted for his own use, according to federal prosecutors.
About $54 million was supposed to go toward projects including the acquisition of an Atlanta office complex. The rest was targeted for a recapitalization of a Miami Beach office building.
The investor funds were intended to be held in bank accounts exclusively designated for those properties. But CrowdStreet didn’t hold those funds in an escrow account and Schwartz tapped them for personal use.
Schwartz settled with the investors in October 2023. He agreed to pay $54 million in quarterly installments by selling off the Miami Beach office property and placing liens on other assets. By the second payment, he had defaulted.
The staggering fraud hasn’t entirely sidelined Schwartz from real estate. Schwartz wrote he’s consulting on other people’s deals, “making sure not to put myself in a position to hold other people’s money.”
He faces a maximum sentence of 20 years in prison, though federal prosecutors are only requesting 78 to 97 months, citing a lack of criminal history and his cooperation with investigators. Schwartz’s attorney is seeking probation.
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