Posted on 02/05/2021 7:54:08 AM PST by Steven Scharf
N.Y. money manager with dealership investments charged in $1.8B Ponzi-like fraud
JONATHAN STEMPEL, Reuters
NEW YORK -- The head of a New York money manager that holds a controlling stake in the nation's 11th-largest auto dealership group was criminally charged along with two associates on Thursday with running what authorities called a $1.8 billion Ponzi-like fraud where thousands of victims were falsely promised steady returns on their investments.
David Gentile, CEO of GPB Capital Holdings LLC, was accused of using new money to repay earlier investors, and together with his co-defendants siphoning millions of dollars to pay themselves and fund luxury expenses, including a Ferrari for Gentile. The federal indictment was unsealed in U.S. District Court in Brooklyn, N.Y.
Authorities said more than 17,000 retail investors were taken in by promises that GPB would provide consistent 8 percent annual returns plus occasional “special” distributions.
Criminal charges were also brought against Jeffry Schneider, the owner of GPB’s placement agent Ascendant Capital, and Jeffrey Lash, a former GPB managing partner.
In a statement GPB said it has been cooperating with the government and is "extremely disappointed" by the charges.
"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," the statement said. "GBP remains confident that the firm acted in good faith during many years of managing funds for investors."
Auto dealership ties GPB Capital Holdings is the majority owner of Prime Automotive Group of Westwood, Mass., which ranks No. 11 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 45,050 new vehicles in 2019.
Prime as of fall 2020 had about 40 dealerships in the Northeast.
The group was formed in late 2017 when dealer David Rosenberg's Prime Motor Group and GPB Capital's Capstone Automotive Group combined.
Rosenberg, Prime’s former CEO, and Rosenberg family trusts sued GPB in 2019 in Massachusetts Superior Court, seeking money Rosenberg says he was owed after he opted in April 2019 to sell his stake in the dealership group. Rosenberg was fired from his CEO role in September 2019.
Several automakers since have demanded that GPB sell some of its stores, out of concern over its handling of Rosenberg’s departure.
Prime did not immediately have a comment when reached by Automotive News. Messages seeking comment were left with current Prime Automotive CEO Todd Skelton.
Civil charges In addition to the federal criminal charges, related civil charges were filed by several state regulators and the U.S. Securities and Exchange Commission, which accused GPB of silencing a known whistleblower and contractually forbidding former employees from talking with the agency.
Lawyers for the individual defendants did not immediately respond to requests for comment.
The Department of Justice said Gentile, 54, lives in Manhasset, N.Y., while Schneider, 52, lives in Austin, Texas and Lash, 51, in Naples, Fla.
According to an indictment unsealed on Thursday, GPB claimed to manage just $239 million as of December 2020, despite having raised more than $1.8 billion since its 2013 founding.
New York Attorney General Letitia James said GPB’s victims were defrauded out of more than $700 million.
In a statement, James said: “We won’t let Wall Street fat cats get away with breaking the rules.”
Massachusetts Dealerships Having over 30 locations in the New England area alone, our selection of new and used vehicles is second to none. If you are seeking a luxury brand vehicle, head over to Audi Westwood, BMW of Norwood, Land Rover Cape Cod, Mercedes-Benz of Westwood, or Prime Volvo Cars South Shore. Are you searching for auto repairs? We have two collision centers in Massachusetts; Prime Collision Center - Boston and Prime Collision Center - Norwell. Some of our other locations across New England include Prime Buick GMC Prime Mazda - Norwood, Prime Subaru - Hyannis, and Prime Toyota - Boston.
Maine Dealerships Prime Chrysler Dodge Jeep Ram in Maine carries new vehicles ranging from the Chrysler Pacifica to the Jeep Grand Cherokee. If you are in the market for a truck, like the Ford F-150, Prime Ford - Saco is bound to have what you need to take on the job. In the unfortunate event of a collision, the technicians at Prime Collision Center - Maine can help you with your auto repair needs.
New Hampshire Dealerships Prime Automotive has two New Hampshire dealerships. The first is Mercedes-Benz of Manchester, which has a full inventory of the latest models, including the Mercedes-Benz CLA and the Mercedes-Benz GLC 300. Our second location is Prime Subaru Manchester located at 764 Second Street in Manchester, New Hampshire.
I find it funny that New York Attorney General Letitia James pointed out that Gentile even bought a Ferrari. I suspect he could afford that Ferrari before he started this ponzi scheme
On a side note my Free Republic clock is showing the time of posting as 1 posted on 2/5/2021, 8:54:08 PM by Steven Scharf at 10:54 am. I can’t figure out how to fix this.
Are you in the Philippines?
No, but at one point I had a vpn aimed at Thailand which is 12 hours. The Philippines is 2 time zones from Thailand. I am in Maine.
It’s probably set to Thai-time on your settings.
If you go to settings, then your locale, you might be able to change that.
Set to EST UTC -5 and all setting US. I have looked everywhere and cannot find the errant setting. My email also shows 12 hours off.
Just saved a text doc and it shows up correctly.
Deleted the VPN. Problem solved for now. Will need to reinstall VPN at some point.
Now on to the main subject of the post.
Prime Motor Group was started by the late Ira Rosenberg here in Maine after he sold his original Mass dealerships. He and his sons then expanded back to Boston. After his death his son sold to GPC who apparently did not pay him all that was owed. I think this set the ball rolling on the fraud investigation.
There, fixed it
WINNER !!
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