Advisers at a New York-based investment firm allegedly bilked investors out of more $700 million so that they could live lavishly, flying on private planes, going on fancy vacations and buying a Ferrari, officials announced Thursday.
David Gentile, Jeffry Schneider and Jeffrey Lash knew that GPB Capital Holdings, LLC had a shortfall of portfolio cash flow but nonetheless duped thousands of people across the country into investing $1.8 billion — including 1,400 New Yorkers who invested $150 million, New York Attorney General Letitia James alleged.
James said GPB was allegedly run like a Ponzi scheme, where the company at least partially paid past investors with money from new ones.
GPB also allegedly doctored financial records to make it look like it was generating income and promised investors 8 percent in annual returns, a suit filed by James’ office alleges.
With investor money, Gentile, 54, Lash, 51, and Schneider, 52, lived the high life, making millions, taking private plane trips and luxe vacations, the court papers say.
Gentile even bought a Ferrari with investor money, the complaint alleges.
“Investors put in more than $1.8 billion into GPB funds but were left without a single cent of profit,” James said in a statement. “GPB and its operators fleeced New Yorkers and investors around the country while subsidizing their own lavish lifestyles.”
Gentile, of Manhasset, NY, Lash, of Naples, Fla., and Schneider, of Austin, Texas, were also criminally charged in Brooklyn federal court for allegedly engaging in a scheme to defraud investors.
Alabama, Georgia, Illinois, Missouri, New Jersey and South Carolina have filed similar lawsuits against the defendants as well as the SEC, James’ office said.
“GPB has been cooperating with government investigations and is extremely disappointed by these developments,” GPB spokeswoman Nancy Sterling said in a statement. “GPB denies these allegations and intends to vigorously defend itself in court where, for the first time, the firm will be able to present significant evidence in its favor.”
“GBP remains confident that the firm acted in good faith during many years of managing funds for investors,” Sterling said. “GPB will continue to work toward increasing asset values and cash flows, while ensuring that the operating companies, their employees, and their commercial partners continue to deliver excellent value to our customers, and ultimately to our investors.”
Lash’s lawyer, Robert Gottlieb, said, “Mr. Lash is a good man with a spotless record. He will plead not guilty when he returns to New York next week and the truth about what occurred will emerge in the courtroom.”
A criminal defense lawyer for Gentile declined to comment.
A lawyer for Schneider did not immediately return requests for comment.
