A Boca Raton man who worked as a developer in New York City was sentenced this week for defrauding investors of $13 million and spending the money on credit card payments for designer clothes and gambling losses.
Joshua Schuster, 42, was sentenced to four years in prison in Manhattan federal court on Tuesday.
As early as 2018 until 2022, Schuster operated a real estate development firm headquartered in Manhattan called Silverback, focusing on high-end residential and mixed-use developments, according to a court document from prosecutors. He raised money from investors, promising them equity in the developments and telling them he would only use the money for specific projects and would not commingle the funds.
He obtained at least $9.6 million from investors and financial institutions through fraud, the document states, and another $4.7 million from corporate accounts he was supposed to manage. He then used the money to pay for personal and business expenses as well as to pay other investors back, similar to a Ponzi scheme. He spent at least $230,000 paying off gambling debts and credit card bills, thousands of which went towards travel and designer clothing. Some of the money went to pay for his children’s school tuition, he said in a letter to the court.
In the letter, Schuster told the judge that he took full responsibility for what he had done. Some of his victims were his best friends, he said. He moved his family to South Florida from New York after finishing addiction treatment in 2022. Prior to his sentencing, he started over at a job arranging rooftop solar installations on commercial buildings, he said, and began volunteering to feed homeless people at a local charity.
“It is a small business, and my income is modest, but it is honest, and how I intend to begin repaying what I owe,” he wrote in the letter.
Schuster was indicted last year on one count of wire fraud and one count of securities fraud and pleaded guilty to the second count on Feb. 27. As part of his sentence, he must also serve three years of supervised release and pay over $13 million in forfeiture as well as restitution, the amount of which has not yet been determined.