Federal Prosecutors Interviewed Alternative Asset Firm’s Former Auditor
Six months after the Justice Department filed criminal charges against ex-GPB Capital Holdings executives for operating an over $1.8B Ponzi scam that defrauded more than 17,000 investors, prosecutors have submitted a court filing disclosing that federal officials have interviewed Alan Materazo of Margolin Winer & Evens, an ex-auditor and accountant for the private placement firm.
Former GPB CEO and founder David Gentile, ex-managing partner Jeffrey Schneider, and Ascendant Capital owner Jeffrey Lash, who were charged with securities fraud, and conspiracy have also come under scrutiny for allegedly using investors’ money to pay for their own expenses. The interview of Materazo may have shed more light on whether this was, in fact, the case.
These executives and GPB Capital Holdings are also the subjects of a parallel civil securities fraud case brought by the Securities and Exchange Commission (SEC). Our GPB Capital Holdings attorneys are representing many investors in their FINRA arbitration claims against the brokerage firms and their registered representatives that sold GPB funds. Call Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) at (800) 259-9010 today.
Private Jets, Luxury Travel, and Other Unrelated Expenses Alleged
The accusations that the three GPB executives spent investors’ funds on their own spending are not new. Earlier this year, New Jersey Attorney General Gurbir S. Grewal filed his state’s complaint accusing the alternative asset firm and its principals of accruing expenses that were for their personal use instead of for tangible business purposes. The NJ lawsuit pointed to Schneider and Gentile, in particular, contending that they made luxury purchases with money from the GPB funds.
InvestmentNews reports that according to documents prepared by Margolin Winer & Evans, the auditor found $58K in travel expenses for a company belonging to Gentile, $47K on private jets, $2,500 for his wife’s travel bills, $12K in ATV rentals in Florida, and nearly $30K for an Amex bill that appears to have included spending related to the former GPB CEO’s birthday.
Investors Suffered Devastating Losses While GPB Executives and Broker-Dealers Profited
Beginning in 2013, GPB Capital offered high-risk private placements that promised buyers 8% returns. Over 60 broker-dealers got on board to market and sell these investments to customers. This caused the firms and their financial firms to earn commissions and fees of up to 11% —for an approximate collective total of over $160M. Meanwhile, GPB investors, many of them seniors and retirees and other retail investors, have sustained massive losses.
Skilled GPB Capital Losses Recovery Lawyers
If you are an investor who suffered losses from the GPB Funds, your best chance at financial recovery is to retain the services of experienced FINRA arbitration lawyers to pursue damages on your behalf. For over 30 years, SSEK Law Firm has been fighting for investors in arbitration, mediation, and litigation. Call (800) 259-9010 to request your free, no-obligation case assessment. We’ve recovered many millions of dollars for our clients.