The real estate portfolio of Wextrust Capital, the investment firm charged with allegedly running a $255 million Ponzi scheme directed at the Orthodox Jewish community, has been put up for sale.
Hilco Real Estate was appointed by receivers to sell 33 income-producing properties located in seven US states. In a statement, the firm said the building were concentrated in the Southeastern US, and include industrial, office, retail and mixed-use properties. The portfolio includes 13 office buildings leased solely to the State of Tennessee.
In August 2008, the Securities and Exchange Commission placed Wextrust’s assets in receivership after alleging the firm’s principals, Steven Byers and Joseph Shereshevsky, ran a Ponzi scheme that raised at least $255 million from at least 1,196 investors since 2002.
The SEC has filed a civil case against the principals while a federal grand jury has indicted the pair on criminal charges. Both the civil and criminal cases are pending before US district judge Denny Chin in the Southern District of New York, according to the Wextrust receivership website.
Timothy Coleman, the Wextrust receiver, said there were many properties in the firm’s portfolio with “substantial equity value, over and above amounts owed to the lenders. We are marketing those properties for sale immediately.”
The portfolio has more than 1.8 million square feet of industrial space, 1.1 million square feet of office space and 215,000 square feet of mixed-use space.