Alleged Fraudster Of Orthodox Jews Denied Bond

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.”

RELATED ARTICLES: 

Alleged Hedge Fund Fraudster Targeted Jews 
Wextrust Capital Readies Offshore ABL Hedge Fund


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.