Wednesday, 31 August 2016
Last updated 3 hours ago
Aug 15 2008 | 7:34am ET
Accused hedge fund fraudster Joseph Shereshevsky will remain in jail to await his arraignment on fraud charges, a federal judge has ruled.
Despite pleas from friends and family, who turned out in droves to Wednesday’s hearing in Norfolk, Va., U.S. Magistrate Judge Tommy Miller denied Shereshevsky’s bid for bond. Calling the WexTrust Capital founder “a thief and a thug”—and noting that Shereshevsky had a one-way plane ticket to Israel and then England when he was arrested Monday, and a 2003 conviction for bank fraud— the judge ruled that Shereshevsky is a flight risk.
Shereshevsky and his partner, Steven Byers, were charged Monday with defrauding investors of $255 million, misappropriating at least $100 million of it. They and WexTrust were also charged by the Securities and Exchange Commission, which won an emergency asset freeze and the appointment of a receiver on Monday.
Most of the victims were Orthodox Jews, a community in which Shereshevsky is reportedly well-known.
Both men face up to five years in prison if convicted on the fraud charges, although additional charges could lead to a much longer sentence, federal prosecutors said.
Shereshevsky’s lawyers denied that he is a flight risk, and downplayed his role at Chicago-based WexTrust.
“Joseph Shereshevsky does not have a business background,” his lawyer, Andrew Sacks, told the judge. “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.”