Guilty plea in Ponzi scheme said to target Jews

Joseph Shereshevsky, a former chief operating officer at WexTrust Capital LLC, pleaded guilty to felony counts of securities fraud, mail fraud and conspiracy in Manhattan federal court

A former private equity executive has pleaded guilty to fraud charges in connection with what federal investigators called a $255 million Ponzi scheme that targeted Orthodox Jews.

Joseph Shereshevsky, a former chief operating officer at WexTrust Capital LLC, pleaded guilty to felony counts of securities fraud, mail fraud and conspiracy in Manhattan federal court, the office of U.S. Attorney Preet Bharara said.

Shereshevsky, 54, could face a prison term of 210 to 262 months under his plea agreement, and will be required to make restitution to victims. Sentencing is scheduled for May 13.

WexTrust's founder and chairman, Steven Byers, pleaded guilty last April to one count each of securities fraud and conspiracy over the same scheme. [ID:nN13142983] He has yet to be sentenced, court records show.

Mark Harris, a lawyer for Shereshevsky, declined to comment.

Shereshevsky lives in Norfolk, Virginia, prosecutors said.

Investigators including the U.S. Securities and Exchange Commission had accused Byers and Shereshevsky of conducting at least 60 private placements purportedly to fund commercial real estate ventures, when in fact they were diverting money to themselves or to pay off prior investors.

In a 2008 civil complaint, the SEC said Chicago-based WexTrust raised the $255 million from at least 1,196 investors, mainly between 2005 and 2008.

The SEC said that Byers was involved with real estate investments, while Shereshevsky's role was to oversee real estate and diamond mining assets and use his "wide