GPB Capital Faces Fraud Charges Over $1.7 Billion Ponzi-Like Scheme
GPB Capital Holdings LLC and three men tied to the private-equity firm face criminal fraud and conspiracy charges that they deceived thousands of investors in what is described as a $1.7 billion Ponzi-like arrangement.
The three, David Gentile, the owner and chief executive of GPB; Jeffry Schneider, the owner and CEO of Ascendant Capital LLC; and Jeffrey Lash, a former GPB managing partner, were all arrested Thursday. They are expected to appear for arraignment in federal courts in Boston; Austin, Texas; and Fort Myers, Fla.
While the New York private-equity firm used promises of steady, 8% dividends from investment gains to lure investors, “a significant portion of GPB’s distributions were paid directly from investor funds,” William F. Sweeney Jr., the assistant director in charge of the New York FBI office, said in a news release.
The Justice Department said that since December 2018, payments have stopped and investors have been unable to retrieve their capital.
GPB, Austin, Texas-based Ascendant and the three men also face civil complaints from the Securities and Exchange Commission and the New York attorney general, including that they defrauded more than 17,000 investors, some 4,000 of them seniors, across the country.