Rabbi Chaim Silver of the B’nai Israel Congregation in Norfolk, Va., says members have called him often with a question about a congregant: "Can I trust Joseph Shereshevsky? I am planning to invest a lot of money with him."
The rabbi assured them: "He is the kindest, most generous, trustworthy man."
Rabbi Silver and a number of Orthodox Jews were shocked by Monday’s arrest of Mr. Shereshevsky and a business partner at WexTrust Capital, a Chicago-based private-equity firm. Federal prosecutors in New York charged them with raising more than $250 million through a Ponzi scheme — mainly from Orthodox Jews.
Mr. Shereshevsky is the son of a prominent rabbi named Chaim Shereshevsky, who is now deceased. Investors say they were disarmed by Mr. Shereshevsky’s faith, his endorsement by Rabbi Silver, and his reputation as a philanthropist. Mr. Shereshevsky supported medical research, schools, and made headlines by sending a private jet to Jamaica to rescue an Orthodox teen who said he was being abused at a reform school.
Using a network of mortgage brokers and salespeople, the firm also raised money from non-Jews. Tim Moore, a 39-year-old biomedical engineer in Virginia, borrowed against his home to invest $140,000 in WexTrust.
“I don’t make much money, so I worked nights for six years to raise extra money,” says Mr. Moore, who has a 3-year-old child. “Now I have to sell my dream house, or lose it, because I can’t afford the payments.”
According to Rabbi Silver, nearly half the congregation’s 150 families live in that neighborhood. He had seven children and four grandchildren, and was known as kind and soft-spoken.
If someone from out of town was passing through and contacted the synagogue for a place to stay, the Shereshevskys opened their doors, Rabbi Silver says.
“He pays people’s mortgages, pays to keep loved ones in a nursing home,” Rabbi Silver says. “People trust him — and you do business with people you trust.”