Norfolk, VA – Relatives and close friends turned out in force Wednesday to support Joseph Shereshevsky ‘s request for release on bond.
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His wife, Elka, and one of his grown daughters, Ahuva Manela, were among those who testified in federal court about his family ties and generosity.
“This community is his home, his life,” his wife told the court in Norfolk. The prospect that Shereshevsky might flee to avoid prosecution wasn’t possible, she said.
Federal magistrate Tommy Miller thought otherwise.
At the end of a three-hour detention hearing, Miller ordered the co-owner of the investment firm to remain in custody until his arraignment on charges of securities fraud. An arraignment date has not been set.
Miller acknowledged that Shereshevsky had been generous with his charitable contributions and appeared to have strong ties to the community. However, “he has a different side as a thief and a thug,” Miller said, citing Shereshevsky’s criminal convictions for bank fraud and attempted grand larceny.
The Securities and Exchange Commission on Monday charged that Shereshevsky, WexTrust Chairman Steven Byers and their firm bilked almost 1,200 investors of more than $100 million by diverting the money to unauthorized purposes. Shereshevsky, 52, of Norfolk, and Byers, 46, of Oak Brook, Ill., operated a classic Ponzi scheme by paying earlier investors with proceeds collected from more recent investors, the SEC alleged.
WexTrust, the SEC said, raised $255 million from investors, most of it in the past three years. With Shereshevsky’s help, the Chicago-based firm preyed on members of the Orthodox Jewish community, the agency contended in its complaint.
More than 50 people packed the courtroom Wednesday as Shereshevsky’s attorney played down his client’s role in the losses suffered by WexTrust clients.
“Joseph Shereshevsky does not have a business background,” attorney Andrew Sacks told the court. “What he brought to the company was a highly energetic personality and a knack for raising money. He was the fundraiser. He was not the accountant. He was not the one who kept the books.”
Shereshevsky, who was brought into the courtroom in handcuffs, closely followed the testimony and occasionally took notes.
Assistant U.S. Attorney Robert Krask argued that Shereshevsky might not show up for his arraignment in federal court in Manhattan, given the prison sentence that he could receive. When he was arrested Monday, Shereshevsky had a plane ticket to Israel and then to England, but he didn’t have a ticket for a return flight, Krask said.
Conviction of the securities-fraud charge against Shereshevsky carries a maximum sentence of five years. However, Shereshevsky may face additional charges and the potential for a much longer sentence, Krask said.
At the request of the SEC, a federal court in Manhattan on Monday ordered that the assets of WexTrust Capital be frozen. The court also appointed a temporary receiver to determine the financial condition of WexTrust and protect its assets.
This is becoming an all too familiar scenario, played out so often in the media to the delight of the goyim – the biggest, richest baalei tzedaka of our communities turn out to be frauds and thieves…does anyone make money legally anymore??
Was in possession of a one way (get out of jail free card)plane ticket out of the country…,I think that pretty much sums up his intentions. Why wouldn’t he have bought a normal round trip ticket, and then simply not used the return portion? Not as “bright” as he looks-throw the book at him!
No one answers the phones at the company and the website is down. ANyone have any info on the status of the projects? If the Feds take over, they may just sell at low prices to liquaidate . Commetns anyone?
Are we supposed to be impressed that he ‘generously’ gives money to charity? It’s not his money he’s giving away!
Are you guys for real????? What company and what projects????? The money was for their own pleasures. If you think you’ll see one PENNY back, you must be dreaming, ask all the guys in Brooklyn who lost everything to this JOKER/CRIMINAL. His daughter going to testify to what a wonderful family man he is – she is as stupid as he is, check out what she did to her ex husband????? She had a wonderful teacher, following in her father’s footsteps.
He didnt buy round a round trip ticket because he was hoping the price of oil would go down and he could get a cheaper ticket later.
WexTrust is now under the control of court approved receivers. They have created a web site for more information at http://www.wextrustreceiver.com/.
murray 9:29AM. …Why wouldn’t he have bought a round trip ticket, and then simply not used the return portion? Not as “bright” as he “Looks”. Throw the book at him… …He doesn’t look bright at all…! Like the spin his attorney was trying to put on it. “He Doesn’t Have a Business Background, He was “Just” a/the Fundraiser”! Yeah, you and me try to raise $200 Mil.!
BTW! we’re opening a new “Investment” Co. by the name “Keren HaTzvi” (Hirshhorn) Also, a non-profit fund is being established for “The Widow of The Unknown Soldier”! Anyone investing in the above-mentioned funds is entitled to 100 Yes, One Hundred) tax-FREE shares in the [NEW] Brooklyn Bridge!!! (The OLD Brooklyn Bridge has already been sold too many times)! This is not an offering. An offering can only be made by prospectus!!!
p.s.: the above statements and figures are for demonstration purposes only and should not be taken literally (hardly figuratively!)
I think we need to step back and think a little. When the story first broke it was charged that they took $255 million. Now it is “only” $100 million. Most likely in one or two deals they didn’t do it on the “up and up” and played around. When the feds come knocking they just lump everything you did into one big “fraud” accusation. When the dust settles I doubt it would seem that the “scam” was of this magnitutde (of course it does not justify even ONE dollar being taken illegally. But the headlines were there because of the outrageous sum.)
Just keep things in prespective before throwing the guy under the bus.
re: Bigwheel: I stand by my original statement- “Not as bright as he looks” Point is he doesn’t look to bright to begin with- my statement should be taken like this–“seems to be even less bright than he looks (which would imply that he is pretty dumb, dummy for not knowing he would get caught eventually (it would inevitably lead to a paper trail right back to his door step.
Why the glee when someone successful goes down? Is it greed? I don’t know this Shereshevsky, but I am sure that he had good intentions, but unfortunately some investments went bad & he had to use fresh money to pay the 1st people.
Anon. 11:36AM. …Most likely in one or two deals they didn’t do it on the up and up… …Yeah, but if it were your $100Mil. You wouldn’t be such a “Maylitz Yosher”! (lit. “Advocate of Righteousness”. i.e. emphasizing the good points [of person or situation]! Think of all the “investors” who put their hard-earned money in his trust! Some deprived themselves of necessities, others mortgaged their future in order for him to live it up…!!!
Heshy 11:51AM. You make me laugh! [for pretending to be so naive] There’s a tremendous difference between an investment Company run by an honest, upright and responsible person in the right way. Yes, some investments CAN and DO go bad! But this is CLEARLY not the case here! And this [former] entity was running a “Ponzi” scheme! Named after a big Ganeff of a prior generation who came up with this idea!
Bigwheel,
would you happen to be related to anyone who got married on Rosh Chodesh Iyar?
where does someone get a personality to be able to raise 100’s of millions of dollars is it in his genes????????? come on the lawyer sounds more stupid than this shereshevsky does….. why are ppl so quick to defend him there are 100’s of families without a penny where will they get the next meal but that no one gives a damn!!!!!!!!!!!! just this ganav everyone is defending him there are thousands of yiddishe children who dont have where to eat because ppl gave their life savings away bec it sounded such a great investment……….. when willppl just wake up and smell the coffee…….. if he is so inoccent why arent they knocking on your door obviously you didnt do anything ………………
after hes thrown in jail HE will be “the court appointed receiver”
“he’s just a fund-raiser” – well now he’ll be a fanny-raiser
Sad. But this seems to be the trick to get the Heimeshe crowd. Give big charity to famous organizations and you are guaranteed to have people throwing money at you for investment. David S. started this and people still fall for it years later. I know that Sharashevsky was at a big BMG meeting at Meridian Capital with all the other big hotshots. He has been all over.
Frum people have to stop dreaming about the homeruns or easy money returns. Get a job or open a small business and work hard and with Hashem’s help you will earn a decent living.
you idiot who starting to bring the daugter into this context. You have any idea you punk of what really goes on? I hope you get yours soon
Lemaseh, he is Yid and we should have rachmanus on him and his family & community.
That’s amazing how people say to have rachamnus on him, but no one thinks of what he can do again and again if he is not put away for a longgggggg lonnngggggg time
Why is the govt. concerned that he will flee the jurisdiction?….Look at the picture, he isn’t fleeing anywhere. I hope he can get a low-cal menu in the slammer.
Hey, I was only pointing out that it was very clear that the daughter was a victim too. But its strange that after Tzvi Gluck goes on public radio and makes a point to praise this guy whom he works for, only a few month ago, and I point that out– VIN takes down my comment. What’s up with that?
Anonymous 11:36:
Reread the original article (it’s just a few pages back). They are charged with diverting more than $100 million of the $255 million raised.
The numbers haven’t changed between the first article and this one.
There is a long way to go from indictment to trial to conviction to jail. Right now he regrets being caught, next he’ll regret causing his own situation, next he’ll regret what he did to others. By the time he has done a few months in the slammer with a long sentence ahead of him he will have done true teshuva. For now, investors, hope for the best, prepare for the worst, and realise that you were destined to lose that money. That he was the Shliach, is for his personal reflection and soul-searching. It will come. Learn & move on.
IF ANYONE STANDS TO LOSE A SIGNIFICANT AMOUNT OF $ PERSONALLY (E.G. $1m+) AND WOULD LIKE LEGAL ADVICE, PLEASE LET ME KNOW AND PROVIDE CONTACT INFORMATION.
Anon. 1:47PM . I don’t know about the rest of the issues [in your post]! But don’t decry the fact that VIN took off, or blocked [any of] your posts!
If I had $100 for each post[ing] that didn’t make it onto the forum, I could start a REAL investment Co. And I’m only thankful for it! My keyboard manages to squeeze out a lot of stuff in a reflexive manner, which I’m happy is being posted only after careful consideration and editing!!!
Mark Levin (the former MLTGO) 12:26PM. Close,[but no cigar]… …Whatever that means! I was married on Rosh Chodesh Nissan…Other than that I don’t see the significance of the date!
BTW. did you get the connection of [the name/s of] the “Investment” funds that I mentioned in my post of 11:18 AM?!
We lost over two million dollars. I told my husband if wasnt bashert. i wil not aggrevate over it…money comes money goes but Health is only ones,,,I say to all investors out there Investing is a risk, and you have to be ready to loose it
FUNDRAISER?? Ask the people who heard his pitch and decided to invest money with him. Did he present himself as the “fundraiser” — or as the business brains that explained how his acumen and experience at managing real estate could produce higher returns than others. Having heard his pitch, I can testify that it was the latter. Very convincingly.
Lea:
You have the right attitude. I am also a victim, but I am hopeful that when all is said and done, I , and other investors for the most part, will recoup 80-100%. So 6-7 mill for the gsa buildings and amybe another 5-6 for Crowne Plaza and another 5-6 for the African mines was diverted. But the mortgage money was lent, all the other projects were bought, and the African mines are still there AND they personally have a net worth in houses and porpery and interests of 5-10 mill each. So as long as the reciever doesnt eat us up with fees or stupid give away deals, we should come out ok. Maybe one or two years later. In any case, this should be for a Kapporah!
Big Wheel,
Not you. A relative perhaps. This past Rosh Chodesh Iyar.
Yes Anon: Blame the receiver. After all, the real culprit is the SEC, not the people who carried out the fraud.
You are entirely optimistic. Some of the money went to pay off the first investors and other money was probably lost because of the poor real estate market. According to information in the SEC criminal and civil complaint, the entities lost at least between 19 and 36 million on an operating basis. This says little about investment losses.
These guys were in over their head and now everybody will pay the price, not to mention the Chillul Hashem.
According to the complaint, the principals in this matter took at least one million dollars in fees for themselves. The civil and criminal complaints are at the SEC website.
Noclue, these guys were in over their head ?
This was premeditated. His previous MO as well as the intercepted email make this very clear.
I did not mean in any way to exonerate them. I should have been more careful in choice of language. What I meant was that if they thought they could pull off this fraud and not get caught they were truly way over their heads.
The scheme surely became premeditated at some point of time, although it is not yet clear whether or not this was from day one. In any case, there was clearly intention (mens rea) for tens of millions of dollars of fraud and that is enough to put these people away for a long, long time.
I would not want to be in their shoes.
Why do these people feel compelled to bring in loshan h’ra about the family. Is it not bad enough for the family that their husband and father is potentially going to jail for a few years? It really hurts me to read comments that express a lack of sensitivity while a family is suffering tremendously.
I lost a LOT of money in ’97 – this was an ipo involving satellite TV stations – except that the ipo NEVER happened and many frum yidden never saw their money again.
Anyone have any info /experience with this scam ??
I wonder who is this one weeing about his family? I’m sure it’s his (Shereshevsky’s) wife herself who also deserves to go to jail and knows this and is afraid of this. Lots of money was transfered to her accounts. She knew that her husband was robbing other families and children and was comfortable with that.
is there any chance of us unfortunate investors recovering anything?
If you invested in this, and lost money, I strongly suggest that you consult an attorney. The SEC will probably get back some money.
However, there may be other persons involved who you can sue.
Suffered Investor: Yossis’ wife is a very sweet woman, who like other Orthodox wives, don’t question where her husbands’ investment or work money comes from. It is born out of trust. All she knows is that she was pretty wealthy, and living well, able to afford to help others, including her step-daughters’ family. You have no idea what you are talking about.
I’m apalled. I can’t believe I am reading posts from supposedly frum individuals. We are all upset and hurt by what happened, no doubt about that.
Let’s not forget who we are, and why we are here. Yossi is a Jew, he may be a criminal, but he is a Jew regardless. He should get the benefit of the doubt, we don’t throw our own to the wolves.
As for his family, and the comments by others about them: Shame on you. His daughter is a sweet woman with small children. Because of this ordeal, she will probably never be able to get married again. His wife, a very sweet person, who also does not deserve harse judgement by fellow Jews.
Just because Tisha B’av is behind us, that does not give us license to do loshon hara for ANY reason.
What doubt? Read the civil and criminal complaints in the SEC website.
I have no idea why we discuss Joe’s personality at all.For me it is just important to get my money back. Who cares about his middos or lacking middos.
Also I saw the Chesed he did but if I had known that he did not give a get to ex wife I would not have invested as it speaks about his personality. But all this is Hashem’s business to judge and take care of as much as to find another Shidduch for Ahuva
ilost 120gs from this shmuck my parents lost over a million i know many poor yungerlight who lost their life savings maybe feel bad for them huh