Real estate Ponzi schemer sentenced to nearly 22 years behind bars

July 18, 2011 06:43PM

A private equity executive was sentenced to nearly 22 years in prison today for swindling more than $9 million from investors in his firm at the height of the real estate boom, according to an announcement from U.S. Attorney Preet Bharara’s office.

The executive, Joseph Shereshevsky, is the co-founder and former COO of WexTrust Capital, which was alleged to have targeted the Orthodox Jewish community in a Ponzi scheme surrounding commercial and residential real estate investments in several states, including New York. Prosecutors said the firm raised money by claiming to purchase properties that they never actually intended to acquire, and spent the money instead to pay other investors and for other, illegal purposes.

Shereshevsky pleaded guilty in February to conspiracy to commit securities and mail fraud. In addition to his prison term, and to giving up the $9.2 million in proceeds he gained from the fraud, he will have to pay roughly $7.9 million in restitution.

WexTrust’s former CEO, Steven Byers, was sentenced to more than 13 years behind bars in April.
— Sarabeth Sanders