Federal Prosecutors Interview Former Auditor of GPB Capital; Filing Could Shed Light on Misappropriation of Funds

GPB Capital Lawsuit

The unraveling of GPB Capital Holdings and the $1.8 billion Ponzi scheme that resulted in over 17,000 investors being defrauded, is now well known. It is now six months since the Department of Justice filed criminal charges against its executives.

GPB Capital promised 8% returns on private placements to investors and sold the securities as risk-free investments to a lot of people whose investing profile did not merit such investments. Lured by the high commissions offered, more than 60 broker-dealers jumped on the bandwagon and sold them to unsuspecting investors without due diligence or moral compunction over the inappropriate sales, in many cases to seniors and retirees.

Over $160M was collected, and paid out by GPB, in sales commissions.

Recent developments in the GPB case

In a recent development, it is learned that federal officials interviewed Margolin Winer & Evans’ Alan Materazo, an accountant at the private placement firm who was also an auditor. This has been disclosed by the prosecutors in a filing to the court. It is expected that this interview will shed more light on suspicions of GPB executives appropriating investor money for meeting personal expenses. Others under a cloud for these suspicions include David Gentile, founder and former CEO of GPB, Jeffrey Schneider, ex-managing partner, as well as Jeffrey Lash, owner of Ascendant Capital.

Parallel civil securities fraud cases have been initiated by the Securities and Exchange Commission (SEC) against the same set of people.

Allegations of non-business expenses

Gurbir S. Grewal, New Jersey Attorney General, filed a complaint earlier in the year on behalf of the state. Accusations against the firm and its executives included the business being charged expenses that were of a solely personal nature and did not result in any benefit to the business. Schneider and Gentile were, in particular, called out for purchases of luxury items out of money that belonged to GPB Holdings.

Documents prepared by Margolin Winer & Evans indicate that $58K had been booked in travel expenses for a company owned by Gentile, while private jets accounted for $47K and his wife’s travel bills $2.5K. In addition, ARV rentals in Florida cost $12K and settlement of an American Express bill that appeared to be for expenses incurred on the birthday celebration of Gentile, $30K. This information was reported by InvestmentNews.

As a GPB Capital investor, what can you do now?

Haselkorn & Thibaut, P.A. (InvestmentFraudLawyers.com) has been actively pursuing FINRA (Financial Industry Regulatory Authority) arbitration cases on behalf of investors, for recovery of their money in the GPB Holdings case. Cases have been filed against the brokerage firms as well as their registered representatives, who are both responsible for ensuring that they do not sell inappropriate investments to their clients.

If you have been adversely impacted because of an investment in a product of GPB Holdings, and if you haven’t already done so, you should immediately contact a FINRA arbitration lawyer for pursuing the claim on your behalf.

For a free case assessment, you can contact InvestmentFraudLawyers.com for a free consultation to discuss investment loss recovery options and get a free GPB Capital Investor Guide. We can be reached at 1-800-856-3352.


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