SEC Charges GPB Capital Holdings, Execs in $1.7 Billion Ponzi Scheme

By February 25, 2021 Ponzi Scheme

The Securities and Exchange Commission has charged GPB Capital Holdings and three of its executives with defrauding around 17,000 investors in a $1.7 billion Ponzi-like scheme.

According to the SEC Press Release, the SEC Complaint alleges that David Gentile, the owner and CEO of GPB Capital, and Jeffry Schneider, the owner of GPB Capital’s placement agent Ascendant Capital, lied to investors about the source of money used to make an 8% annualized distribution payment to investors.

GPB Capital Holdings told investors that the payments were paid exclusives with monies generated by GPB Capital’s portfolio companies. But the SEC complaint alleges that GPB Capital actually used investor money to pay portions of the distribution payments instead.

In addition, GPB Capital and Gentile, with assistance from former GPB Capital managing partner Jeffrey Lash, also allegedLY manipulated the financial statements of certain limited partnership funds managed by GPB Capital to give the false appearance that the funds’ income could support the distribution payments.

The SEC also charged the defendants with misappropriating funds, including using investor funds on private planes, a Ferrari, and also funneling millions of dollars into personal and family bank accounts.

Fishman Haygood’s Investment Fraud Division has experience bringing claims on behalf of investors who were the victims of Ponzi schemes. If you believe you have suffered losses due to the advice and/or actions of your broker or investment advisor, please contact us to discuss your possible claim.