NORFOLK
Relatives and close friends turned out in force Wednesday to support Joseph Shereshevsky 's request for release on bond.
His wife, Elka, and one of his grown daughters, Ahuva Manela, were among those who testified in federal court about his family ties and generosity.
"This community is his home, his life," his wife told the court in Norfolk. The prospect that Shereshevsky might flee to avoid prosecution wasn't possible, she said.
Federal magistrate Tommy Miller thought otherwise.
At the end of a three-hour detention hearing, Miller ordered the co-owner of the investment firm to remain in custody until his arraignment on charges of securities fraud. An arraignment date has not been set.
Miller acknowledged that Shereshevsky had been generous with his charitable contributions and appeared to have strong ties to the community. However, "he has a different side as a thief and a thug," Miller said, citing Shereshevsky's criminal convictions for bank fraud and attempted grand larceny.
The Securities and Exchange Commission on Monday charged that Shereshevsky, WexTrust Chairman Steven Byers and their firm bilked almost 1,200 investors of more than $100 million by diverting the money to unauthorized purposes. Shereshevsky, 52, of Norfolk, and Byers, 46, of Oak Brook, Ill., operated a classic Ponzi scheme by paying earlier investors with proceeds collected from more recent investors, the SEC alleged.
WexTrust, the SEC said, raised $255 million from investors, most of it in the past three years. With Shereshevsky's help, the Chicago-based firm preyed on members of the Orthodox Jewish community, the agency contended in its complaint.
More than 50 people packed the courtroom Wednesday as Shereshevsky's attorney played down his client's role in the losses suffered by WexTrust clients.
"Joseph Shereshevsky does not have a business background," attorney Andrew Sacks told the court. "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."
Shereshevsky, who was brought into the courtroom in handcuffs, closely followed the testimony and occasionally took notes.
Assistant U.S. Attorney Robert Krask argued that Shereshevsky might not show up for his arraignment in federal court in Manhattan, given the prison sentence that he could receive. When he was arrested Monday, Shereshevsky had a plane ticket to Israel and then to England, but he didn't have a ticket for a return flight, Krask said.
Conviction of the securities-fraud charge against Shereshevsky carries a maximum sentence of five years. However, Shereshevsky may face additional charges and the potential for a much longer sentence, Krask said.
At the request of the SEC, a federal court in Manhattan on Monday ordered that the assets of WexTrust Capital be frozen. The court also appointed a temporary receiver to determine the financial condition of WexTrust and protect its assets.
Tom Shean, (757) 446-2379, tom.shean@pilotonline.com
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it was going to happen
i find it interesting that the people of norfolk thought that they would be exempt from being screwed by joseph heller - shereshevsky,even though they knew he was charged once before. with siegal as his lawyer, he will get out and do it again. all of you people need to be warned, and make sure that the wife does not protect him like she has. wake up people - he was a good guy on your money. how do you tell your children that there dreams are broken because your neighbor wanted to look like a hero.
JOSEPH SHERESHEVSKY
mr. shereshevsy is a very respectable gentleman in the norfolk, va area. he
should be able to obtain bail when you have people that is out on bond for worst crime than this. never judge a person until he or she has their day in court. he is innocent until proven guilty. that is true for everything!
Not just a common thief
If you knew anything about our judicial system you would know that a "hood" who gets bond is probably charged in state court, where practically everyone is given the oppurtunity to have a bond. Someone with Federal charges in Federal court has a much higher burden to prove that they are not going to be a flight risk or danger to the community. Although he is innocent until proven guilty, bilking honest people out of $100 million is alot more than your common thief. I doubt the "hood" has access to the millions of dollars that are probably still unaccounted for. And how many of these investors lives have been potentially destroyed? How many of them have lost their whole life savings? THATS WHAT I THINK!!
Punishment fits the crime
Most "hoods" who kill someone don't have the money or resources to flee the country. This guy does. Keep him Locked Up!!!!
Comparisons
This guy allegedly steals 100M$ and can't get bail because he is a flight risk. A hood kills a citizen and is granted bail. What is wrong with this? Just doesn't seem fair, does it? The 100M$ theif will plead it down to whatever and serve a longer time than the hood that kills a citizen and pleads it down to manslaughter or whatever. While both are real crimes, which requires more prosecution and less pleading? I know what I think, what do you think?
Doesn't it just fit that first post dominates of appearanance
No doubt there is white colar crime in this story but my observation recides in the first post. Appearance over issues; always in Hampton-Roads... Home of the devide, where polarities creare sides not substance
He's a jewel
of Hampton Roads.