Investor Recovery – GPB Capital Called Ponzi-Like Scheme; Fund Managers Indicted

shutterstock_143179897-300x300The law offices of Gana Weinstein LLP continue have represented over 100 investors defrauded in GPB Capital relating investments.  For nearly two years our firm has been filing complaints against the brokerage firms that wrongfully sold these products alleging that GPB Capital has all the tell-tale signs of being a scam.  On February 4, 2021 the U.S. Securities and Exchange Commission (SEC), the U.S. Attorney’s Office for the Eastern District of New York (DOJ), and seven states filed separate simultaneous actions against GPB Capital and other defendants connected to the firm accusing it of being a Ponzi-like scheme.  In a press release the SEC stated that it “charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion…”[1]

As reported by Bloomberg “If proved, [GPB] would be one of the largest such schemes to target individual investors since the massive frauds of Bernard Madoff and Robert Allen Stanford came to light.”[2]  The DOJ indicted David Gentile, the founder of GPB, Jeffry Schneider, the owner and CEO of Ascendant Capital LLC, and Jeffrey Lash, a former managing partner of GPB relating to the fraud.  If convicted, the defendants each face up to 20 years’ imprisonment.[3]  New York Attorney General Letitia James accused GPB of “defrauding investors across the country out of more than $700 million through a Ponzi-like scheme that offered to pay investors generous monthly distributions they could never deliver.”[4]  Further, “Investors put in more than $1.8 billion into GPB funds but were left without a single cent of profit,” said Attorney General James.  The fraud was alleged to have been carried out by “failing to disclose numerous conflicted transactions involving related parties, as well as misappropriations of fund assets, all of which served to benefit” GPB and its owners.

Where did investor money go? “Investor funds were spent to subsidize private planes and luxury travel for the three defendants, direct payments totaling millions of dollars into personal bank accounts, and payments to family members. Defendant Gentile even purchased a Ferrari sports car with investor funds.”  Id.

What’s GPB Worth Now?  No one knows for sure.  “According to court papers, GPB claimed to manage just $239 million as of December, despite raising the $1.8 billion.”[5]  If true, this would reflect approximately 13% of investors’ total investments across all GPB funds.

GPB Capital Holding’s funds include:

GPB Cold Storage

GPB Automotive Fund

GPB Automotive Income

GPB Holdings II and III

GPB Waste Management

GPB NY Development

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors.  Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Our Efforts On Behalf of Investors

Our law firm has represented over 100 investors in claims against broker-dealers for failing in their obligations to avoid selling clients Ponzi-scheme investments like GPB.  Many of the claims made by regulators and law enforcement echo claims that our firms have been alleging on behalf of clients for nearly two years. Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.  At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts.  Claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.

[1] SEC Charges Investment Adviser and Others With Defrauding Over 17,000 Retail Investors (available at:

[2] Bloomberg News (available at:

[3] GPB Capital Founder and CEO Among Three Individuals Indicted in Private Equity Investment Fraud (available at:

[4] Attorney General James Sues Private Equity Fund Manager for Ponzi-Like Investment Scheme that Defrauded Investors Out of More Than $700 Million (available at:

[5] NY money manager charged in $1.8 billion Ponzi-like fraud, Reuters (available at:

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