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Articles Tagged with GPB Holdings I

Jeffry Schneider, David Gentile, and Jeffrey Lash, GPB Capital Principals Indicted

Our firm has written extensively about GPB Capital and allegations that the “investments” were a massive Ponzi scheme. The U.S. District Attorney for the Eastern District of New York has indicted several of the principals of GPB Capital, and the indictment was unsealed today, February 4, 2021.

Specifically, the district attorney incited Jeffry Schneider, David Gentile, and Jeffrey Lash. These individuals were also all arrested today and will appear before local courts for initial appearances in Austin, Texas, Fort Myers, Florida, and Boston, Massachusetts. According to the indictment, Jeffry Schneider, David Gentile, and Jeffrey Lash misrepresented the GPB Capital investments to investors about “the source of funds used to pay monthly distribution payments to investors in several of the GPB Funds, including Holdings I, Automotive Portfolio and Holdings II, and (b) the revenue generated by Holdings I in 2014 and Automotive Portfolio in 2015.” These allegations are also non-exclusive, meaning the prosecuting attorneys are leaving open-ended the totality of misrepresentations that are at issue.

According to InvestmentNews, alternative asset management company GPB Capital Holdings has notified investors and custodians that its different private placement funds have recently suffered 25-73% losses in value. It’s largest funds, the GPB Automotive Portfolio and GPB Holdings II—together, these two raised $1.27B from investors—have experienced 38% and 25.4% drops, respectively. Such significant losses are clearly not good for investors, who, collectively, have invested about $1.8B in all of the GPB funds.

These private placement funds are invested mostly in waste management and car dealerships and they, along with GPB Capital Holdings, have come under intense scrutiny by both the government and investors. Set up in 2013, the company last year suspended all redemptions involving its funds. An auditing company retained by GPB Capital stepped down in November not long after questions regarding the company’s accounting practices and sales methods arose.

About 60 broker-dealers have sold GPB funds to investors. Advisers usually make a substantial commission for selling the private placements—a typically higher rate than what they’d get for selling mutual funds.

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