We will certainly see bigger scams, but unsure if anyone will top the chutzpah of Elie Schwartz's CrowdStreet-enabled caper. The Promote dove through all the coverage (WSJ, Bisnow, TRD, our own) to bring you this 7 deadly sins highlight reel
1) CrowdStreet: The platform through which Schwartz raised funds for the CRE deals capers is now speaking of “justice in action.” But you’ll recall that they gave Schwartz their blue-chip “enterprise” sponsor designation (based on stated volume of projects rather than actual track record), marketed the Atlanta Financial Center deal as “$10B Enterprise Sponsor Brings Trophy Asset with Huge Potential in Hot Market,” dismissed Nightingale’s omissions of prior foreclosures and defaults as inessential, and neglected to hold the crowdfunding monies in escrow. They’ve since started to hold funds in escrow and dismissed their CEO, but that’s little comfort for the Nightingale deal investors, who’ve sought to shut the platform down.
2) Divine Justice: An arbitration clause in the deals’ operating agreements stipulated that any disputes would be settled by a rabbinical court.
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