Ex-boss of Chicago equity firm sentenced in NYC

By Dow Jones Newswires-Wall Street Journal
Posted April 12 at 7:12 a.m.

The former chief executive of Chicago-based private-equity firm WexTrust Capital LLC was sentenced to more than 13 years in prison a year after pleading guilty last year to a fraud that cost investors $9.2 million.

Steven Byers, 48, pleaded guilty to conspiracy to commit fraud and securities fraud linked to a $9.2 million portion of the scheme in April 2010. He was sentenced Monday in federal court in Manhattan to 13 years and four months in prison.

Prosecutors had claimed that a Ponzi scheme at WexTrust defrauded investors, many of them Orthodox Jews, out of more than $200 million.

Byers “used smoke and mirrors to defraud his investors out of millions of dollars,” U.S. Attorney Preet Bharara for the Southern District of New York said Monday in a release. “But his scheme was ultimately exposed for the sham that it was, and now he will be punished severely for his crimes.”

According to court documents, Byers and others raised the $9.2 million purportedly to buy commercial properties, but they were never purchased and the funds instead were used for other purposes not disclosed to investors.

In addition to a 160-month prison term, Byers was sentenced to three years of supervised release and ordered him to pay $7.7 million in restitution, in addition to a $9.2 million forfeiture of proceeds from the crimes.

Another defendant in the case, Joseph Shereshevsky, pleaded guilty to similar charges in February and is scheduled to be sentenced in May.


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