New York, GPB Capital investors continue to wait for their money as the firm’s receivership process drags on.
The receiver now has 45 days to propose a distribution plan for the $1.8 billion raised from thousands of investors. This development comes after a federal judge denied requests for a new trial from GPB executives convicted of fraud.
Investors can contact Haselkorn & Thibaut for a free consultation on recovery losses at 1-888-784-3315 or visit their website.
Key Takeaways
- GPB Capital is under receivership after fraud allegations, with investors waiting for their money since 2018.
- The receiver has 45 days to create a distribution plan for the $1.8 billion raised from investors between 2013-2018.
- GPB Capital spent $75 million on legal costs for executives during the receivership process.
- A federal judge denied requests for a new trial from GPB executives David Gentile and Jeff Schneider in August 2024.
- Both executives face sentencing in April 2025 for running what prosecutors called a Ponzi-like scheme that harmed thousands of investors.
Judge Rachel P. Kovner of the U.S. District Court for the Eastern District of New York rejected motions for acquittal and a new trial from GPB Capital founder David Gentile and distribution chief Jeff Schneider. The judge also denied Gentile’s motion to dismiss the indictment based on claims of prosecutorial misconduct.
The executives were convicted in August 2024 of running what prosecutors called a Ponzi-like scheme that put investors’ money at risk. Their sentencing is set for April 2025.
The receivership aims to create an orderly liquidation process, but the criminal cases against the executives make recovery efforts more difficult.
GPB Capital, founded in 2013, raised $1.8 billion in just five years by selling high-risk private placements through independent broker-dealers. The firm focused on car dealerships and waste management businesses, promising investors an annual return of 8%.
Problems began in 2018 when GPB failed to file audited financial statements with the Securities and Exchange Commission (SEC) on time. Investor distributions stopped that same year, leaving many without access to their capital for over six years.
Many of the investors are retirees who trusted their financial advisors when they recommended GPB investments; They’vee been waiting since 2018 for their money.
The firm managed over six funds before the SEC and Financial Industry Regulatory Authority (FINRA) launched investigations into its practices. These investigations led to civil actions and criminal charges against the company’s leadership.
During the receivership process, GPB Capital has spent approximately $75 million on legal costs for Gentile and Schneider, further reducing the pool of money available to investors.
Many investors have filed FINRA arbitration claims against the broker-dealers who sold them GPB investments, arguing they failed to conduct proper due diligence. These claims cite violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
“The broker-dealers had a duty to investigate these investments before selling them to clients,” said a securities attorney familiar with the cases. “Many investors are pursuing civil claims to recover their losses.”
Some investors have also filed whistleblower complaints with the SEC, hoping to recover some of their losses through the agency’s whistleblower protection program.
The receiver’s upcoming distribution plan will detail how remaining assets will be divided among investors. Legal experts note that investors typically recover only a fraction of their original investment in fraud cases.
For now, thousands of GPB Capital investors continue to wait, hoping the receivership process will return at least some of their hard-earned money.
