I’ve received emails asking me why I have not linked the Joseph Shereshevsky below to the Rabbi Yossi Sharashefsky who refused for many years to give his wife a get (Jewish divorce).
The reason I have not linked them is that there last names are spelled diffrently and I am not at all sure they are the same guy.
The SEC complaint says that Joseph Shereshevsky is also known as "Joseph Heller" aka "Yossi."
A source from Israel confirms that they are the same guy. "Luke, Trust me. It’s the same guy! He’s Israeli so there are a few ways to spell the name."
Another source says: "That’s him. The commercial real estate angle gives it away, and yes, the smaller Orthodox community on the East Coast was Norfolk. Well, she’s still sweet. Her last name would sell to those that think sleaze when they hear his last name, hence he had it in her name. I’m glad that, like Jack Abramoff and Robin Hood, he used his illicit gains for good. Let’s see how this plays out (he owned 20% to Byers’ 60% of Wextrust), but this looks like the doo-doo (sorry for using technical words here) will stick."
The Securities and Exchange Commission on Monday charged Chicago-based Wextrust Capital LLC and its affiliates with fraud, alleging that the company ran a Ponzi scheme that raised at least $255 million by targeting members of the Orthodox Jewish community.
The SEC said Wextrust principals Steven Byers and Joseph Shereshevsky deceived at least 1,196 investors since 2002. The defendants diverted at least $100 million to unauthorized purposes, according to the SEC’s complaint.
Shereshevsky, the agency said, is a convicted felon who pleaded guilty to bank fraud in 2003. He took the lead in soliciting investors through his wide-contacts in the Orthodox Jewish community, the SEC said.
The SEC asked for an emergency order to freeze the defendants’ assets and place the Wextrust entities under the control of a receiver to safeguard assets.
"Affinity frauds are especially pernicious because the victims tend to let their guards down in circumstances where they might otherwise proceed with much more caution," said Andrew M. Calamari, the SEC’s associate director of enforcement.
The complaint said Wextrust entities conducted at least 60 securities offerings through private placements and created approximately 150 entities, ostensibly to fund commercial real estate ventures. Instead, the defendants allegedly diverted funds to pay returns to investors in prior offerings or to pay their own expenses.
JTA says: "Shereshevsky lived in Norfolk, Va., and was known to be a supporter of many Jewish causes. He is also a convicted felon who pleaded guilty to bank fraud in 2003."
According to authorities, Byers and Shereshevsky used money raised from private-placement investors to fund the firm’s operations and repay earlier investors.
The government claimed that, in one example, the company raised $9.2 million from investors, telling them the money would be used to buy and operate seven properties that would be leased to the U.S. General Services Administration.
“The seven GSA properties, however, were never purchased, the monies raised to purchase the properties were used for some other purpose, and investors were not informed,” Garcia said.
A private placement is a negotiated sale in which securities are sold directly to investors, rather than through a public offering.
Byers owns 60 percent of WexTrust, and Shereshevsky owns 20 percent, the SEC said. WexTrust is owner of at least 120 entities formed to acquire real-estate interests, and it has conducted at least 60 private placements since 2005, the SEC said.
“Defendants have been fraudulently raising money in the various offerings, each of which purportedly is for a particular investment, without disclosing that funds raised were actually being used to pay prior investors in unrelated offerings,” the SEC said in its complaint.
The criminal case is U.S. v. Byers, U.S. District Court, Southern District of New York (Manhattan). The SEC case is SEC v. Steven Byers, 08-cv-7104, U.S. District Court, Southern District of New York (Manhattan).