2 Indicted For Defrauding Investors In Ponzi Scheme

As we reported recently, Steven Byers, 46, of Oakbrook, Illinois, and Joseph Shereshevsky, 51, of Norfolk, Virginia (right and left in 2006 photo here), were indicted last week on one count each of securities fraud and conspiracy for defrauding investors in a $9.2 million fraud scheme. Byers and Shereshevshky, principals of WexTrust Capital LLC, based in Chicago, Illinois, had been charged by the SEC in late August of running a massive $255 million Ponzi scheme which targeted members of the Orthodox Jewish community. According to the SEC complaint, the scheme convinced some 1200 investors to invest in WexTrust and various affiliates since at least 2005 through a series of securities offerings and private placements. The SEC complaint alleged that "at least $100 million had been diverted for unauthorized purposes." It turns out that Shereshevsky, who has used a variety of aliases, has a prior criminal history in that he plead guilty to one felony count of bank fraud in June 2003. He also has a bank fraud conviction in 1994, according to published reports.

Read our earlier post here.

Read more of the ongoing saga, here, here, here and here.

Read the SEC litigation announcement here.

Update (4/13/10): Steven Byers, now 47, pleaded guilty today to one count of securities fraud and one count of conspiracy in connection with his part in running a $255 million Ponzi-type investment fraud scheme that targeted the Jewish investment community. Byers faces a sentence of 151 to 188 months in prison under his plea agreement, and he could be ordered to forfeit $9.2 million in illegally obtained investment funds.