According to an article in the Tampa Bay Times, on February 4, 2021, David Gentile, 54, the founder and CEO of GPB Capital was charged with five felonies. GPB Capital, founded in 2013 is based in New York. GPB has an office in One Clearwater Tower in downtown Clearwater, two floors above the City Hall. CEO David Gentile also owns a condo in Water’s Edge, two blocks from the Church of Scientology’s international headquarters, where he is a member.
According to the indictment unsealed by a federal judge on February 4th, GPB Capital allegedly defrauded investors of $1.8 billion in a Ponzi-like scheme alleging that nearly one-fourth of the 17,000 victims were seniors. This alleged Ponzi-like scheme used new investors to pay old investors while continuing to allegedly lie to the clients about their profits.
The Department of Justice stated that CEO David Gentile and associates, Jeffery Lash and Jeffry Schneider, were arrested on February 4, 2021, and charged with wire fraud, securities fraud, and conspiracy. According to the Department of Justice, if convicted, they could each face up to 20 years in prison.
Not only were these criminal charges filed in New York, but seven state securities agencies filed regulatory actions against GPB Capital. This follows years of complaints and lawsuits filed against GPB. According to the Tampa Bay Times article, the Securities and Exchange Commission (SEC) filed a 37-page complaint against Gentile, Lash, and Schneider, alleging 17,000 victims of the “Ponzi-like scheme,” with nearly one-quarter of the victims identified as seniors.
GPB Capital invested primarily in automotive retail, healthcare, and waste management. Allegedly, GPB promised an 8% return to their investors that would be covered by the cash flow. According to the indictment, they raised $1.8 billion.
The article states that as early as 2015, GPB Capital was unable to fund distributions through its under-performing operations. They paid clients using new investor money, but by December of 2018, the monthly payments stopped. The Tampa Bay Times article goes on to say that State complaints filed against GPB Capital also alleged that David Gentile and his associates used the fund assets to enrich themselves, which included private jet travel and a Ferrari for David Gentile, the Administrators Association said in a statement.
The alleged Ponzi-like scheme involved targeting accredited investors, who had net worth or income qualifying them to participate in private placement securities transactions which make them exempt from federal and state registration, according to the North American Securities Administrators Association.
“GPB denies these allegations and intends to vigorously defend itself in court where, for the first time, the firm will be able to present significant evidence in its favor,” GPB Capital spokesperson Nancy Sterling said. “GBP remains confident that the firm acted in good faith during many years of managing funds for investors. GPB will continue to work toward increasing asset values and cash flows, while ensuring that the operating companies, their employees, and their commercial partners continue to deliver excellent value to our customers, and ultimately to our investors”
If you or an elderly family member have been a victim in the alleged GPB Capital’s Ponzi-like scheme which was allegedly orchestrated by CEO David Gentile and his associates, contact the Florida-based Soreide Law Group and speak to an experienced securities lawyer regarding the possible recovery of your investment losses through a FINRA arbitration at 888-760-6552.
Soreide Law Group represents clients nationwide before FINRA on a contingency fee basis–no fee to you if no recovery.