GPB Capital CEO Gentile Indicted in Alleged $1.7 Billion Fraud

Patricia Hurtado

(Bloomberg) -- GPB Capital Holdings chief David Gentile was indicted for allegedly taking part in a years-long Ponzi-like scheme that raised more than $1.7 billion and defrauded thousands of investors across the U.S.

Gentile, the New York investment advisory firm’s founder and chief executive officer, was charged with conspiracy, securities and wire fraud in an indictment unsealed Thursday in federal court in Brooklyn, New York.

In a complaint also filed in Brooklyn, the Securities and Exchange Commission claimed that Gentile and two other executives used the funds to cover shortfalls, paying out monthly distributions instead of making investments as promised, affecting some 17,000 investors across the U.S.

The funds were spent to subsidize private planes and luxury travel for the three, according to a separate suit filed by New York Attorney General Letitia James. Payments went to the executives’ personal bank accounts and to family members, and Gentile even purchased a Ferrari with the money, James alleged.

In addition to the Justice Department, the SEC and New York state, New Jersey Attorney General Gurbir Grewal announced that the state’s Bureau of Securities had filed an enforcement action against the firm and others, and sued GPB and five co-defendants for allegedly defrauding investors by offering to pay out big monthly distributions they could never deliver.

Howard Elisofon, a lawyer for GPB, didn’t immediately return a call seeking comment on the allegations.

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