A person familiar with the matter revealed that the former Managing Director of GPB Capital Holdings was accused of participating in a $1.8 billion Ponzi scheme, and US prosecutors claimed that the platform defrauded thousands of investors.
In 2021, GPB founder and former CEO David Gentile, along with another executive and Jeffrey Lash from Naples, Florida, were sued. The reason for the lawsuit is that David Gentile and others illegally raised funds to make up for the shortage of funds and for their own use, but claimed to clients that they were earning returns.
A related complaint from the US SEC indicates that approximately 17000 investors have been affected, of which approximately 4000 are elderly people. If this accusation is confirmed, it will be another large-scale Ponzi scheme targeting individual investors, following Bernard Madoff and Robert Allen Stanford.
According to insiders, one of the prosecutors, Jeffrey Rush, went from refusing to plead guilty to pleading guilty during a court hearing on June 13th. Currently, Rush's lawyer Robert Gottlieb did not immediately respond to phone calls and emails requesting comment. A spokesperson for Brooklyn federal prosecutor Breon Peace did not respond to emails seeking answers.
If convicted, David Gentile will face up to 20 years in prison and a fine of up to $5 million. Jeffrey Schneider, owner of Ascendant Capital, a GPB placement agent, has also been sued in Austin, Texas.
According to another lawsuit filed by New York Attorney General Letitia James in 2021, GPB used the funds to subsidize the private jets and luxury travel of three executives. James claimed that investors made payments into their personal bank accounts and family member bank accounts, and David Gentile even used the money to purchase a Ferrari, with an estimated fraud amount of over $700 million.
US District Judge Diane Gujarati has been overseeing the case and has arranged for the trial of three defendants to begin on June 3, 2024. In February of this year, she rejected the defense argument questioning the scale of the fraud.
