CEO pleads guilty to felony wire fraud after failed Buckhead office deal

Schwartz was charged and arraigned in early December and waived indictment. By pleading guilty, Schwartz will avoid a trial.

He faces a maximum of 20 years in prison, a fine up to $250,000 or twice the gross gain or loss and supervision for up to 3 years.

During Wednesday’s hearing, Assistant U.S. Attorney Kelly Connors stated that the estimated amount of restitution owed by Schwartz was $62.8 million. The executive vocally opposed this number, one of few statements he made during the hearing.

U.S. District Court Judge Steven Grimberg reminded Schwartz restitution is not determined until sentencing.

Schwartz’s defense attorney Colin M. Garrett did not immediately respond to a request for comment. Sentencing was set for May 19 at 2 p.m.

In a press release issued after the hearing, the Atlanta’s Acting Special Agent in Charge of the FBI Sean Burke said investment fraud schemes are just as destructive as violent crimes because they destroy the livelihoods of families.

“Schwartz admitted to this complex scheme out of pure greed and will now face the steep consequences,” Burke said in the release.

Schwartz’s company solicited investors on a website called CrowdStreet as one part of the overall financing to acquire the two properties. For the Atlanta Financial Center deal, Nightingale raised about $54 million from more than 600 backers, all of whom invested a minimum of $25,000. The company said it intended to renovate the property.

Built during the 1980s, the three-tower Atlanta Financial Center is a nearly 915,000-square-foot office complex on Peachtree Road that overhangs Ga. 400. Landlord Sumitomo Corp. agreed in June 2022 to sell the entire complex to Nightingale for $182 million, but the sale never closed.

Between June 2022 and June 2023, Schwartz transferred money from an account for the Atlanta building into another account he controlled, according to the prosecutors. A portion of those funds were eventually sent to a luxury watch dealer to pay a $30,000 installment on a Gronefeld 1941 Remontoire watch, which can sell for more than $100,000. Additionally, Schwartz used funds to pay payroll expenses for his other commercial real estate businesses and to purchase different stocks and call options, according to the prosecutors.

Midway through 2023, several investors in the Atlanta Financial Center deal reportedly began requesting a return of their money after the deal still had not closed. Nightingale agreed to comply, but a number of requests remained outstanding. CrowdStreet asked Nightingale to produce documents indicating investors’ funds were in a bank account created for the transaction, but Nightingale did not agree to the request, according to the Atlanta Business Chronicle. That prompted an independent fiduciary to take over the two investment entities. Those entities entered bankruptcy in July 2023, revealing only $127,000 of the funds were remaining.

Schwartz signed a $55 million settlement deal two months later, agreeing to pay back investors in quarterly installments. But after making a $3 million payment in January, no other payments were made, prosecutors said. A bankruptcy judge earlier this year ruled that Schwartz’s assets could be seized to repay spurned investors.

— Staff writer Zach Hansen contributed to this report.