Manhattan, NY – The founder and chairman of WexTrust Capital LLC has pleaded guilty to fraud in connection with what federal investigators called a $255 million Ponzi scheme that targeted Orthodox Jews.
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Steven Byers, 47, admitted to one count of securities fraud and one count of conspiracy at a Tuesday hearing before U.S. District Judge Denny Chin in Manhattan federal court.
He could face a sentence of 151 to 188 months in prison under his plea agreement, and be ordered to forfeit $9.2 million of ill-gotten gains. Byers is free on bail pending a sentencing set for September 13.
Investigators accused Byers and former WexTrust Chief Operating Officer Joseph Shereshevsky of conducting at least 60 private placements and creating 150 entities purportedly to fund commercial real estate ventures, when in fact they were diverting money to themselves or to pay off prior investors.
In a 2008 civil complaint, the U.S. Securities and Exchange Commission said Chicago-based WexTrust raised the $255 million from at least 1,196 investors, mainly between 2005 and 2008.
The SEC said Byers was involved with real estate investments, while Shereshevsky’s role was to oversee real estate and diamond mining assets and use his “wide contacts” in the Orthodox Jewish community to solicit investors.
According to the SEC complaint, Byers founded WexTrust in 2003 and owned 60 percent of the firm, while Shereshevsky owned 20 percent. Byers lived in Oak Brook, Illinois, and Shereshevsky in Norfolk, Virginia, the SEC said at the time.
Shereshevsky has denied wrongdoing. Lawyers for the defendants were not immediately available for comment.
In an amended indictment last July, prosecutors accused the defendants of three counts of securities fraud, two counts of mail fraud, and one count each of wire fraud and conspiracy.
In a Ponzi scheme, money from new investors is used to pay off old ones. Chin in July approved a receiver’s plan to liquidate WexTrust’s assets and distribute proceeds to victims.
All I can say is WOW when I compare this guys future and Mr. Rubashkin’s future and the terms they are both expecting! And don’t forget to compare the amounts stolen as well. Good luck to all.
Yossi, you’ve come a long way since our 18th avenue Sunday morning softball games.
a ha! SMR for 35 mil he faces 1100 years and this crook for 225 just 185 years
Byers stole $255 million and faces a maximum of 14 years jail and R’ Sholom faces a lifetime sentence? This makes sense?
and rubashking is facing a longer sentence…go figure
Based on current Federal guidelines for Jews, he’ll get 500 years.
whats with sereshevsky??
Byers is not a Jew. A thief, but not a Jew. Yossi will get more time when that thief is convicted as he still denies wrongdoing and was instrumental in the affinity element of the crime. Rot in jail rasha!!!!!!!!!!!!!!
And I don’t want to see anyone claiming the poor Jew Yossi is being treated unfairly because he’s a yid. He’s a true rasha…..ask anyone who lost money or their reputations because of their association with this animal.
dont do the crime if you do not wants to do the dime
Now you will see the genius behind taking a plea bargain and the gaiveh of refusing one to go to trial. There are no sentencing guidelines for plea deals – they are negotiated. (Hence when you are a guilty travel agent and you are offered 1 and 1/3 to 4 and you refuse it, you get 10 and 2/3 to 32 after trial. All gaiveh.)
Rubashkin will sit longer than this guy who stole more and had more victims because his lawyers and his advisors and all the heilige rabbonim told him to fight and refuse a plea. Shame on them. The Hechts and Zweibels should sit with him.
Why is everyone condemning these people – there is no proof against them. there was not trial with proof – only a plea and a persistent denial. Stop the bashing
May they all rot till they die. This was hard earned money that was going into supposedly legitimate real estate deals. The leverage wasnt outrageous, the properties showed cash flow positive and all they had to do was be honest. Instead they stole this money and put it into their farkakte diamond mine in Zimbabwe where another crook ripped them off. THey funneled MY MONEY that was supposed to go in to a safe real estate deal to Africa ! Pure Gezelah. I dont forgive them and I wish their progeny all manner of illnesses and poverty until they pay back every penny they stole.
isnt it nice- we are all sitting and discussing who gets more time in jail- and I thought we were a holy people-excuse me while I go vomit.
Why don’t we all learn to live simpler lives? How many creature comforts do you need?
#23 and #24 : Don’t wish harm on his progeny. His ex-wife and daughter from first marraige suffered enough from him. His own family have been the most unfortunate victims. His parents, siblings, children, etc. have suffered the most. What they lost, money can’t replace.