GPB Capital Faces Fraud Charges Over $1.7 Billion Ponzi-Like Scheme

 

 

GPB Capital Holdings LLC,A private equity firm face criminal fraud and conspiracy charges feeding thousands of investors in a 1.7 billion Ponzi-like scheme.

The Defendants allegedly misrepresented GPB’s performance and paid distributions with investor funds, reports the FBI.

 

David Gentile,  owner and chief executive of GPB; Jeffry Schneider, owner and CEO of Ascendant Capital LLC; and Jeffrey Lash,  former GPB managing partner, were  arrested Thursday, Feb 4, 2021.  They are expected to appear  for arraignment  in federal courts in Boston; Austin, Texas; and Fort Myers, Fla.

Robinhood’s CEO and other regulators to appear before House for hearing on GameStop Frenzy Trading

The complaint summary filed in court on shows the following:

1.This case concerns a long-running and multi-faceted fraudulent scheme perpetrated by GPB Capital, a registered investment adviser; its owner and CEO, Gentile; AAS, a registered broker-dealer, and its branch office, Ascendant Capital; Schneider, the owner and CEO of Ascendant Capital; and Lash, a former managing partner of GPB Capital.

  1. GPB Capital describes itself as a New York-based alternative asset management firm that acts as a general partner and fund manager for limited partnership funds. The limited partnership funds invest in various businesses with a focus primarily on automotive retail, waste management, and healthcare (collectively, the “Portfolio Companies”). Since its founding in 2013, GPB Capital has raised in excess of $1.7 billion for at least five limited partnership funds from approximately 17,000 retail investors nationwide, approximately 4,000 of whom are seniors. Nearly all of the $1.7 billion raised is still at risk: in 2018 GPB Capital suspended all redemptions and distributions and, according to a recent regulatory filing, GPB Capital’s assets are far below its obligations to the investors.

3.But the aura of success portrayed by the GPB and Ascendant Defendants was an illusion. In reality, GPB Capital used investor funds to cover the shortfall between funds from operations of the Portfolio Companies and the amount needed to make an annualized 8% Case 1:21-cv-00583 Document 1 Filed 02/04/21 Page 2 of 37 PageID #: 2 -distribution payment. GPB Capital and Gentile, with substantial assistance from Lash, also manipulated the financial statements for two of the limited partnership funds in the early years of the offering to give the false appearance to prospective investors and investors that the Portfolio Companies were generating sufficient income to cover the distribution payments to investors. Source:SEC.gov

 
Photo


Follow us on Google news for more updates and News










PLEASE READ THE IMPORTANT DISCLOSURES BELOW.

This content is being provided to you for informational purposes only. The content has been prepared by third parties not affiliated with CWEB Inc, a business. This content and any information contained therein, does not constitute a recommendation by CWEB to buy, sell or hold any security, financial product or instrument referenced in the content. This information neither is, nor should be construed as an offer, or a solicitation of an offer, to buy or sell securities by CWEB Inc. CWEB Inc. does not offer or provide any opinion regarding the nature, potential, value, suitability or profitability of any particular investment or investment strategy, and you shall be fully responsible for any investment decisions you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.

Unless stated otherwise, the web content provided by the CWEB family of companies is for educational purposes only. The information and tools provided neither are, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities by CWEB Inc. or its affiliates. Unless stated otherwise, no information presented constitutes a recommendation by CWEB Inc. or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy.

Full Disclaimer

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.