Ex-WexTrust COO fails to get bail down from $10M

Joseph Shereshevsky, a Norfolk investment manager being detained in New York City on charges of securities fraud, must remain in custody until he posts $10 million bail, a federal judge determined Tuesday.

In a filing with the U.S. District Court in Manhattan last month, Shereshevsky asked that the amount be cut to $5 million and that other bail conditions be eased.

Shereshevsky, a part owner and former chief operating officer of the investment firm WexTrust Capital, was arrested in August on charges of bilking investors who provided funds to buy seven office buildings. WexTrust never bought the buildings but led investors to think it had, according to the government's complaint.

Steven Byers of Oak Brook, Ill., WexTrust's CEO and majority owner, also was arrested in August on charges of securities fraud. Both men are being held at the Metropolitan Detention Center in Brooklyn.

U.S. District Judge Denny Chin said during the hearing Tuesday that part of the $49 million of WexTrust funds that Shereshevsky sent to Africa for investments was still missing and that Shereshevsky faced 15 years in prison if convicted at a trial. "There is a significant risk of flight," Chin said.

During most of the half-hour hearing, the focus was on Shereshevsky's motion to have the bail amount reduced to $5 million, said his attorney, Michael O. Hueston. He declined to comment on the hearing's outcome.

In a filing with the court last week, federal prosecutors objected to Shereshevsky's motion for a lower bail, saying that nothing had changed to warrant a reduction.

 This report contains information from Bloomberg News.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com