New York Real Estate Fraudster Misallocated Millions, SEC Says

A New York real-estate company known as Silverback Development and its owner, Joshua Schuster, are accused of defrauding investors by misappropriating more than $2 million of investor funds meant for a high-end condominium development project, according to an SEC enforcement action.

The Securities and Exchange Commission alleged Wednesday that Schuster and his company raised $6 million for a purported development on Second Avenue in Manahattan but ultimately used more than a third of the proceeds for his personal benefit, to cover Silverback’s expenses, and to fund other real estate projects.

Schuster, who used his company to sell memberships in several ...