- Josh Schuster, ex-Silverback Development CEO, is accused of investor fraud and faces up to 40 years in prison.
- Prosecutors allege he used over $10M of investor funds for personal luxuries rather than promised NYC developments.
- Schuster allegedly ran a “Ponzi-like” scheme, using new investments to pay earlier backers and maintain a façade of success.
A Fall From Grace
Once seen as a rising real estate star, Josh Schuster now faces federal investor fraud charges for allegedly defrauding investors while leading Silverback Development. He was taken into custody in South Florida, where he relocated after the collapse of his firm, per the Real Deal.
How It Unraveled
Between 2018 and 2022, Schuster raised tens of millions for real estate projects across New York City. However, he used much of that money on personal expenses, which prosecutors now point to as clear evidence of investor fraud, including luxury tuition, country clubs, and gambling debts. Rather than investing in promised projects, he diverted funds to maintain the illusion of success.
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Investor Losses Mount
For example, one investor contributed $23.6M and co-signed a $40M construction loan for a Queens development. Instead of using the money for construction, Schuster allegedly paid off a $180,000 credit card bill and returned $50,000 to another investor. In another instance, he used the same investor’s funds to cover a $140,000 bill in 2021.
A Pattern of Deception
The indictment outlines a consistent scheme: Schuster took in new funds and used them to pay previous obligations. As a result, prosecutors describe his actions as “Ponzi-like.” In 2020, he used a $2.5M investment meant for a Bronx project to pay down personal debt and cover private school tuition.
From Momentum to Meltdown
Silverpeak, a $21B asset manager, initially backed Schuster and helped him build early momentum. However, the partnership ended when stakeholders accused him of misconduct. Over time, lawsuits accumulated, team members departed, and investors reported being misled about how their money was used.
What’s Next
Despite the fallout, Schuster launched a new venture in Florida called SolarBack. He claims it raised $300M and manages 200 commercial rooftops. Still, the federal charges threaten to end his career entirely, as he now faces up to 40 years in prison for wire, securities, and investor fraud.
