Authorities say Schuster ran a Ponzi-style scheme, misusing funds meant for high-end NYC developments
A former New York City real estate developer has been arrested and charged with defrauding investors out of more than $10 million in a scheme tied to high-profile real estate projects, federal authorities announced.
Joshua Schuster, 41, of Boca Raton, Florida, was charged with wire fraud and securities fraud. Schuster, who ran the Manhattan-based firm Silverback Development, was arrested and is set to appear in the US District Court for the Southern District of Florida.
“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,” US Attorney Jay Clayton said. “The women and men of our Office are committed to protecting investors and our markets from fraud and abuse.”
According to the indictment, Schuster ran the scheme between 2018 and 2022 through his Manhattan-based company, Silverback Development. He lured investors by promoting elite opportunities in New York City real estate, promising that their funds would be used exclusively to acquire and develop high-end projects in areas such as Gramercy Park, Long Island City, and the Bronx. Schuster represented Silverback as a premier investment platform supported by his market expertise.
However, authorities allege that behind the scenes, Schuster misused investor money to bankroll personal expenses, including over $1 million in personal credit card payments and hundreds of thousands of dollars in gambling losses. He also allegedly used new investor funds to pay back earlier investors in a Ponzi-like scheme, cover unrelated business obligations, and maintain payroll.
“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,” said FBI assistant director in charge Christopher Raia. “This alleged scheme betrayed prospective buyers’ trust and pockets to finance his lifestyle and cover personal delinquent debts.”
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Schuster faces one count of wire fraud and one count of securities fraud, each carrying a maximum sentence of 20 years in prison. While the maximum penalties are determined by statute, the ultimate sentence will be set by the presiding judge.
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