Defense Argument: A Plan Gone Wrong
Schwartz’s attorney, Colin Garrett of the Federal Defender Program, argued for a more lenient sentence, portraying his client as a once-successful entrepreneur who made poor decisions as the business fell apart. Garrett claimed the fraud only emerged “midstream” as Schwartz realized the deals would not close. At that point, he began using funds improperly in what Garrett described as a “good faith belief” that he could fix the situation.
“He’s always played a bit fast and loose with money,” Garrett admitted. “But he believed he could pull it off and make the investors whole.”
Garrett also emphasized that many of the defrauded investors were wealthy individuals who accepted the inherent risk of speculative real estate ventures.
Judge Rebukes “Victim Blaming”
Judge Grimberg was unswayed, particularly criticizing the claim — echoed by prosecutors — that no investors had suffered “substantial financial hardship” under federal sentencing guidelines.
“They consented to that money being out of their accounts and out of their control,” Garrett argued.
“But they didn’t consent to fraud,” the judge snapped back.
Grimberg cited testimony from investors who had to delay retirement due to their losses and pushed back against arguments that the financial standing of the victims minimized the harm done.
“I would be truly shocked if the parties could find any case, anywhere in the country, where both prosecution and defense agreed no substantial hardship existed,” Grimberg said.
