Jay Clayton, the United States Attorney for the Southern District of New York, and Christopher G. Raia, Assistant Director in Charge of the FBI's New York Field Office, have announced charges against former real estate developer Joshua Schuster. Schuster is accused of defrauding investors involved in major real estate projects in New York City. He was arrested and will appear in the U.S. District Court for the Southern District of Florida under Judge Valerie E. Caproni.
U.S. Attorney Jay Clayton stated: “As alleged, Joshua Schuster stole more than $10 million from his investors to fund his own lifestyle, pay off other investors in a Ponzi fashion, and maintain the appearance of success.” He emphasized their commitment to protecting investors from fraud.
FBI Assistant Director Christopher G. Raia added: “Joshua Schuster allegedly stole more than ten million dollars from New York City real estate investors through inaccurate statements of fund usage and exaggerated portrayals of his business’s reputation.” Raia noted that this scheme financed Schuster's lifestyle and personal debts.
The indictment alleges that between 2018 and 2022, Schuster misled investors who entrusted him with millions for high-end real estate developments through his company Silverback Development based in Manhattan. Investors were promised equity in projects located across various parts of New York City including Gramercy Park and Long Island City.
Contrary to these promises, it is alleged that Schuster used investor funds for personal expenses such as credit card payments exceeding $1 million and gambling losses amounting to hundreds of thousands. Additionally, he reportedly repaid earlier investors using new funds in a Ponzi-like manner while covering unrelated business costs.
Schuster faces one count each of wire fraud and securities fraud; both charges carry potential maximum sentences of 20 years imprisonment each if convicted.
Clayton commended the FBI's efforts on this case and acknowledged assistance from the U.S. Securities and Exchange Commission which has filed a parallel civil action. The prosecution is being managed by Assistant U.S. Attorney Daniel G. Nessim under the Securities and Commodities Fraud Task Force.