The fraud investment with the Ponzi scheme occurred again in the United States (US). After the Madoff Investment Securities case. It caused an uproar in America in 2008 and tarnished the name of Securities and Exchange Commission / SEC. This time a similar fraud occurred again.
The founder of a money management company in New York and two of his colleagues were criminally charged on Thursday (4/2/20201. It running a fraud with a Ponzi scheme worth US $ 1.8 billion. He is David Gentile (54), chief executive of GPB Capital Holdings LLC.
Gentile is accused of defrauding more than 17,000 retail investors. He promises a steady annual return on investment of 8% even when the company incurs a loss.
Authorities said the Manhattan-based GPB promised investors that their payments would be funded by revenue from corporate holdings, including a group of auto dealers. In fact, this portion comes from new investors’ money.
The defendants are also suspected of siphoning off millions of dollars for themselves. This includes luxury items such as a Ferrari for Gentile and an American Express bill of US $ 29,837 for Gentile’s 50th birthday celebration.
Perpetrators Who Make Investments
In addition to Gentile, a number of former partners managing GPB are also charged with the same charges. He is Jeffrey Lash (51) from Naples, Florida and Jeffry Schneider (52) from Austin, Texas, who owns the GPB placement agency, Ascendant Capital LLC.
Each was charged with securities fraud and conspiracy. Gentile and Lash were also charged with wire fraud. A crime involving the sending of letters or electronic transmission of anything related to fraud.
A related civil suit was filed by New York Attorney General Letitia James, who said the victim lost more than US $ 700 million. As well as by several other federal and state regulators.
According to court documents, GPB claims to only manage US $ 239 million as of December. Although the company turned out to raise US $ 1.8 billion.
Complaints from the US Securities and Exchange Commission include allegations that the GPB has silenced known whistleblowers and prohibited former employees from speaking to agencies. In a statement, the GPB denied the allegations and said it would defend itself.
Reported by CNBC International, Thursday (4/2/2021), until now Gentile’s lawyer did not respond to comments. Moreover, Schneider’s lawyer could not be reached. Meanwhile, Lash’s lawyer, said his client would plead not guilty.
