Economy

The SEC says more than 17,000 investors have been defrauded in a Ponzi-like scheme

The SEC says more than 17,000 investors have been defrauded in a Ponzi-like scheme
The The lawsuit alleges David Gentil, owner and CEO, Jeffrey Schneider, owner of Ascendant Capital, recruiting agent at GPB Capital, and Jeffrey Lash, former managing partner of GPB Capital, used investor’s own money to pay monthly dividends to investors rather than putting them toward client investments. GBP Capital has also been charged with violating whistleblower protection laws.

Investors were told that their 8% monthly dividend would be fully covered by portfolio companies’ profits, despite executives knowing their shortage. But in reality, the investors were at least partly paid with money from new investors.

The defendants allegedly falsified the financial statements and created dated performance guarantees to show income that was not present.

GPB claims it acted in good faith while managing investor funds.

The company said in a statement to CNN Business that “GBB denies these allegations and intends to strongly defend itself in court as the company will be for the first time able to present important evidence in its favor.”

New York State also filed a lawsuit against GPB on Thursday.

New York Attorney General Letitia James too lawsuit Against GPB Capital and the three executives for defrauding investors of more than $ 700 million. More than 1,400 New Yorkers have invested more than $ 150 million in promises of generous monthly dividends.

“We will not let Wall Street fat cats get away with breaking the rules because they steal the New York Governor in the meantime,” James said in a statement.

The complaint also accused the defendants of misappropriating funds. Investors’ money was spent to subsidize private jets, luxury travel, and funnel millions of dollars into personal and family bank accounts, New York AG claims. The lawsuit alleges that Gentile bought the Ferrari with investors’ money.

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Along with the New York East District Office and the SEC, several states from Alabama to New Jersey filed their own lawsuits against GPB Capital.

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