SECRETARY RAFFENSPERGER JOINS SEVERAL STATES, SEC, TO BUST $1.8 BILLION PONZI SCHEME
(ATLANTA)-Georgia Secretary of State Brad Raffensperger, through the Securities Division, has worked with several other states and the U.S. Securities and Exchange Commission to stop a $1.8 billion Ponzi Scheme that duped over 900 Georgians who invested over $78 million dollars total. In a coordinated action, the U.S. Attorney’s Office for the Eastern District of New York have taken the perpetrators into custody on related charges.
“I am proud of the work that the dedicated staff in my office has done to help bring these criminals to justice,” said Secretary Raffensperger. “I am proud to work every day to protect the people of Georgia from the scam artists and outright frauds that seek to take advantage of them. We will work with partners in other states and on the federal level to help the innocent Georgians victimized in this Ponzi Scheme.”
Along with South Carolina, Alabama, New York, Illinois, Missouri, and New Jersey, the Secretary of State’s Securities Division submitted a filing to take action against New York-based GPB Capital, its three principals, and associated entities.
Between 2013 and 2018, GPB Capital’s principals lured investors with a promise of monthly payments totaling an 8% annual rate. GPB Capital claimed that the payments were fully funded by cash flow from the portfolio companies. However, they soon began to use the capital provided by other investors to make the promised payments.
Additionally, these individuals allegedly used investor funds to fund a lavish lifestyle for themselves, including private jet travel and the purchase of a Ferrari. One of the named individuals paid his spouse a full salary from the company in addition to paying his spouse’s now defunct law firm significant consulting fees.
Overall, approximately 17,000 individuals across the United States were affected by the scam. The Securities Division helped track down and identify the more than 900 individuals in Georgia who invested more than $78 million in GPB Capital.
In addition to working with state and federal partners to secure restitution for the Georgia victims, the Secretary of State’s office has submitted an administrative filling that will ban the two individuals who operated in Georgia – David Gentile of Florida, and Jeffry Schneider of Texas – from ever working in the industry in Georgia again. Additionally, the Secretary of State’s office has issued a $520,000 penalty against GPB Capital and its associated entities.
The three principals have been taken into custody and will face criminal charges.