The Promote Podcast Crowd Comes for CrowdStreet & LifeCo Lenders Roar
Apr 2, 2025
Explore the shocking crowdfunding scam involving CrowdStreet and the repercussions linked to Elie Schwartz. Hear about the negligence in overseeing investor funds and the bizarre twists, including luxury watches and unusual contract clauses. Discover how CMBS is adapting to fill the gap left by banks in construction financing. Plus, delve into the controversial nepotism practices at Paramount Group and how life insurance companies have transformed into vital players in private equity. It's a rollercoaster of real estate insights!
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Platform Liability In Crowdfunding
- CrowdStreet enabled a sponsor to raise ~$56M without escrow and failed to prevent misuse of funds.
- Will Krasne argues the platform is clearly responsible for users' behavior and oversight failures.
Sponsor Splurges Instead Of Closing Deals
- Ellie Schwartz diverted investor capital to luxury watches, options and penthouses instead of buying properties.
- Hiten Samtani and Will call it CRE's biggest crowdfunding scam and highlight absurd contract clauses.
Always Insist On Escrow For Raises
- Do not wire investor funds to sponsors without escrow or a custodian to hold closing funds.
- Demand escrow stipulations and verified closing controls before committing capital on platforms.
