Justice Department Files Parallel Criminal Charges Against GPB Capital’s David Gentile and Others
The Securities and Exchange Commission (SEC) has filed civil charges against GPB Capital Holdings CEO and owner David Gentile, ex-GPB managing partner Jeffrey Lash, Ascendant Capital owner Jeffry Schneider, and affiliated entities, including Ascendant Alternative Strategies, of defrauding 17,000 retail investors in a more than $1.7B in a Ponzi-like scam.
GPB Capital Holdings, an alternative asset firm that invests in auto dealerships and waste management, has been under investigation over Ponzi fraud allegations by the SEC, the Federal Bureau of Investigation (FBI), the Financial Industry Regulatory Authority (FINRA), and others for more than two years. Now, in a parallel case, the U.S. Attorney’s Office for the Eastern District of New York has filed criminal charges indicting Gentile, Lash, and Schneider. If convicted, they could each spend up to two decades in prison.
Our GPB private placement fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) have been pursuing broker fraud claims against the brokerage firms and their registered representatives that earned over $160M in commissions from marketing and selling GPB Funds to their customers. The SEC case and the criminal indictments are further evidence that thousands of inexperienced investors, including retirees, became the victims of a massive Ponzi scam when they invested in GPB. Contact us at (800) 259-9010 today.
Gentile, Lash, and Schneider Accused of Concealing Ponzi Fraud
According to the SEC, David Gentile and Jeffrey Lash lied to investors about the source of funds from which an 8% annualized distribution was to be paid to investors.
Schneider is the owner of Ascendant Capital, which is GPB Capital Holdings’ private placement agent. Meanwhile, Ascendant Alternative Strategies marketed the investments and purportedly told investors that they were being paid solely through funds made by the different GPB portfolio companies. Instead, contends the Commission, GPB Capital Holdings used investors’ money to pay part of these distribution payments in Ponzi-like fashion.
The regulator is accusing GPB Capital, Gentile, and Lash, of manipulating some of the GPB Funds’ financial statements to make it appear as if they were making enough money to pay for the distributions. GPB Capital and Ascendant Capital allegedly made misrepresentations about the millions of dollars in compensation and fees that Schneider and Gentile were paid.
The SEC also contends that this Ponzi scam went on for over four years and defendants took steps to hide the true financial condition of the GPB Funds. The Commission says that GPB Capital Holdings violated whistleblower protection laws by creating separation and termination agreements with language in it that stopped people from being able to talk to the regulator.
The SEC is seeking disgorgement of ill-gotten gains, prejudgment interest, and penalties.
Other States File Parallel Fraud Lawsuits
Following news of the SEC’s case, a number of states including New York, New Jersey, Alabama, Illinois, Missouri, and South Carolina have filed their own cases. For example, NY Attorney General Letitia James is suing the same defendants as the SEC. She claims that investors were defrauded of more than $700M, including over 1,400 New Yorkers who invested more than $150M in the GPB Funds. New York is seeking restitution and disgorgement.
Experienced GPB Private Placement Fraud Attorneys
Even with the SEC, criminal prosecutors, and state attorneys general pursuing financial recovery from GPB Capital Holdings and its executives, it is still important that if you are an investor who lost money from GPB private placements you consider filing your own individual claim. Having your own seasoned investment fraud lawyers fighting for you and protecting your rights increases your chances of maximum recovery.
Contact SSEK Law Firm today.