Developer Josh Schuster To Plead Guilty To Securities Fraud
Josh Schuster, who was arrested in May and charged with operating a “Ponzi-like” scheme, is expected to plead guilty to securities fraud this week.
U.S. Attorney for the Southern District of New York Jay Clayton alerted District Judge Valerie Caproni in a Feb. 10 filing that Schuster, who allegedly defrauded investors in multiple real estate projects of more than $10M, intends to change his earlier plea of not guilty. A change-of-plea hearing is scheduled for Friday afternoon.
An attorney for Schuster didn’t immediately respond to requests for comment. The Real Deal first reported the filing.
Schuster was also charged with wire fraud for a scheme in which he allegedly diverted funds earmarked for development costs to cover more than $1M in personal credit card payments, tuition at a New York City private school, and hundreds of thousands of dollars in gambling losses, according to his indictment.
Each of the two counts carries a maximum sentence of 20 years in prison. Prosecutors didn't address the fate of the wire fraud charge in the filing.
The same day the Justice Department secured an indictment against Schuster, the Securities and Exchange Commission filed its own lawsuit against the developer with similar allegations. That case has been stayed until the criminal proceedings are resolved, according to court records.
Schuster originally pleaded not guilty to the charges and has been out on a $2M bond since May, TRD reported. He swapped attorneys in September.
Schuster founded Silverback Development in 2016 at the age of 32. As the grandson of famous project executive Jack Schuster, Josh Schuster was nearly instantly doing high-profile deals.
But behind the scenes, Schuster found himself struggling with debt, both personal and professional. He allegedly diverted investments he received between 2018 and 2022 to his personal accounts.
Federal regulators also claim that Schuster’s firm “knowingly or recklessly” failed to disclose financial information to its investors. DOJ and SEC officials say the fraud took place at developments in Manhattan, Queens and the Bronx.
Eventually, Schuster began defaulting on mortgage agreements. Silverback was removed from a 53-unit condo project in Gramercy Park. Afterward, a partner in the joint venture conducted a forensic audit, finding that roughly $2M was missing.
Schuster has faced several other lawsuits over misappropriated funds, gambling debt and failure to make rent payments at luxury apartments.
In recent years, Schuster moved to Boca Raton, Florida, where he launched a solar-energy venture called Solarback. He posted on LinkedIn in June, a month after his arrest, that he had “endured his own period of reckoning” but had emerged resolved to make a social impact through his solar business.
“Launching Solarback wasn’t just a business decision; it was a spiritual pivot,” he wrote. “It’s a way to use everything I’ve built, learned, lost, and regained to help others tap into their own transformation — through energy, through design, through purpose. Adversity has a way of refining your values. Mine are clear now: create impact, build with intention, and always move toward the light.”
