Nightingale CEO Elie Schwartz Faces Federal Charges

According to The Real Deal, Elie Schwartz, CEO of Nightingale Properties, is set to face federal arraignment on December 4th, accused of misappropriating $54M from crowdfunding investors. 

The case stems from a US Department of Justice probe into alleged fraudulent activities involving commercial real estate investments.

Allegedly…

Schwartz allegedly misused the millions raised through CrowdStreet for two projects: the acquisition of an Atlanta office property and renovations for a Miami Beach office building. Investors were reportedly unaware that funds were not placed in escrow, a misstep that allowed money to go unaccounted for.

CrowdStreet has since appointed an independent fiduciary to recover the missing funds. The platform described Schwartz’s arraignment as “a critical step forward in holding accountable those who engaged in fraudulent activity.”

Failing to Settle

In October 2023, Schwartz agreed to a settlement with investors to repay quarterly $4M. 

However, the disgraced CEO has only completed one payment and defaulted on the second, compounding his company’s financial troubles. Nightingale has defaulted on several loans, further damaging its credibility.

What’s Next?

The federal charges against Schwartz are expected to shed light on the scale and specifics of the alleged fraud. The arraignment marks a pivotal moment in the legal proceedings and could set a precedent for how similar cases are handled in the commercial real estate sector.

Investors and industry observers are closely monitoring the case, with CrowdStreet emphasizing the importance of rebuilding trust and advocating for stricter accountability measures in crowdfunding investments.