The Securities and Exchange Commission announced charges today against Elchonon ‘Elie’ Schwartz, a resident of New York, New York, and his New York-based, privately held commercial real estate investment firm, Nightingale Properties LLC, for defrauding at least 700 investors of more than $52 million.
The SEC’s complaint alleges that, from May 2022 through March 2023, Schwartz and Nightingale raised over $60 million in two separate offerings conducted on an internet-based platform connecting investors with commercial real estate investment opportunities.
According to the complaint, Schwartz and Nightingale falsely told investors that they would use their funds to either purchase or recapitalise two specific commercial real-estate deals in Atlanta, Georgia, and Miami Beach, Florida.
The SEC alleged that, in reality, Schwartz and Nightingale used investor funds to prop up other failing Nightingale commercial real estate projects, purchase watches and property, including a penthouse condominium, and engage in unprofitable trading in personal brokerage accounts.
The SEC’s complaint, filed in the United States District Court for the Northern District of Georgia, charges Schwartz and Nightingale with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks injunctions, disgorgement, and civil money penalties.
In a parallel action, in December 2024, the U.S. Attorney’s Office for the Northern District of Georgia and the Fraud Section of the U.S. Department of Justice filed a criminal information charging Schwartz with wire fraud. The criminal information is pending.
