“GPB Capital used investor funds to cover the shortfall between funds from operations of the Portfolio Companies and the amount needed to make an annualized 8% distribution payment.”

💡 This directly contradicts what GPB Capital told investors and proves the company operated a Ponzi-like scheme using new investor money to pay earlier investors.

“Since its founding in 2013, GPB Capital has raised in excess of $1.7 billion for at least five limited partnership funds from approximately 17,000 retail investors nationwide, approximately 4,000 of whom are seniors. Nearly all of the $1.7 billion raised is still at risk: in 2018 GPB Capital suspended all redemptions and distributions and, according to a recent regulatory filing, GPB Capital’s assets are far below its obligations to the investors.”

💡 Thousands of ordinary people, including vulnerable seniors, lost access to their retirement savings while the company’s assets collapsed in value.

“GPB Capital, Gentile, AAS, Ascendant Capital, and Schneider stressed in the offering and marketing materials for the limited partnership funds that GPB Capital made the distribution and special distribution payments exclusively with funds from operations of the Portfolio Companies.”

💡 The company’s entire marketing strategy was built on a lie about where distribution payments came from, inducing investors to put money into what they believed was a profitable business.

“GPB Capital and Gentile, with substantial assistance from Lash, also manipulated the financial statements for two of the limited partnership funds in the early years of the offering to give the false appearance to prospective investors and investors that the Portfolio Companies were generating sufficient income to cover the distribution payments to investors.”

💡 Beyond just using investor money improperly, executives actively falsified financial records to hide the fraud and keep attracting new victims.

“Gentile instructed GPB Capital representatives to prepare and execute back-dated ‘performance guarantees’ in March 2015 whereby Lash ‘guaranteed’ a minimum profit of $600,000 for the year ended December 31, 2014, from these Volkswagen dealerships, which meant that Lash would pay the dealerships for the losses plus an additional $600,000, which would be distributable to Holdings I.”

💡 This shows executives deliberately fabricated financial documents and revenue that never existed, creating fake profits to justify paying distributions and attracting more investor money.

“Lash never paid the amount allegedly owed under the ‘performance guarantees.’ Indeed, the ‘debt’ was eventually forgiven by GPB Capital and Gentile as a part of a settlement with Lash in November 2018 in connection with a lawsuit filed against GPB Capital and Gentile.”

💡 The fake guarantees were never intended to be paid, proving they existed solely to manipulate financial statements and deceive investors about fund performance.

“The fraudulent guarantees had the effect of overstating net income by a total of 66% as reported by Holdings I for the period ended December 31, 2014.”

💡 By overstating income by two-thirds, executives made a fund that was losing money appear profitable, fundamentally deceiving investors about the financial health of their investment.

“If investors knew that, because the Portfolio Companies were underperforming, distributions were being paid with other investors’ capital instead of funds from operations of the Portfolio Companies, they could and would have redeemed earlier and thereby avoided the losses that investors are now facing.”

💡 The deception prevented investors from protecting themselves when they still had time to get their money out, causing them to suffer losses they could have avoided.

“Cold Storage paid acquisition fees totaling approximately $599,000 to GPB Capital on or about December 23, 2015 and July 12, 2016, in connection with acquisitions made during 2015 and 2016. GPB Capital diverted $250,000 of the fee received from Cold Storage on or about December 23, 2015 to an entity owned by Gentile the next day, on or about December 24, 2015.”

💡 Executives enriched themselves by diverting investor money to their own companies in violation of the fund’s offering documents, demonstrating blatant self-dealing.

“Gentile and Schneider determined the terms of any acquisition, including what the total cost or value of that acquisition would be. Because the amount of acquisition fee was dependent upon the total cost or value of the acquisition, Gentile and Schneider were incentivized to overpay for an acquisition, so that the acquisition fee they would ultimately receive would be a larger amount.”

💡 Executives had a hidden financial incentive to waste investor money on overpriced acquisitions so they could pocket bigger fees, directly harming fund returns.

“Gentile and Schneider received ‘board stipends’ from Portfolio Companies owned by Automotive Portfolio and Holdings I. There was no ‘board’ on which Gentile and Schneider participated and they had no legitimate claim to these payments. Nor did Gentile or Schneider perform any additional work in connection with these payments, and the dealerships expensed the stipends, which reduced their overall profitability.”

💡 Executives invented fake board positions to justify paying themselves over $1.5 million from portfolio companies, reducing the profitability available to investors.

“A Transition Agreement and General Release dated January 17, 2017, between a senior GPB Capital employee (‘Employee 1’) and GPB Capital contained confidentiality provisions that did not carve out any exceptions for communications with the Commission.”

💡 The company tried to prevent employees who knew about the fraud from reporting it to regulators, showing a deliberate effort to cover up misconduct.

“A Separation Agreement and General Release dated April 26, 2018, between a senior GPB Capital employee (‘Employee 2’) and GPB Capital likewise stated that if Employee 2 was ‘contracted by any regulatory agency or authority, including, but not limited to, the Securities and Exchange Commission or Financial Industry Regulatory Authority,’ Employee 2 had to ‘immediately notify GPB.'”

💡 This violated whistleblower protection laws by requiring employees to tip off the company if regulators tried to investigate, allowing executives to prepare cover-up strategies.

“On September 13 2019, GPB Capital’s then-CCO told Gentile: ‘To the extent that [Employee 3] revealed information to auditors . . . that was confidential but otherwise truthful . . . I think this would be an important deterrent in moving forward with a plan to terminate him as it would be viewed as Retaliatory by [the Commission].’ Despite that, Employee 3 was terminated three days later, on September 16, 2019.”

💡 Even after being explicitly warned that firing a whistleblower would be illegal retaliation, Gentile terminated the employee anyway, showing contempt for legal accountability.

“GPB Capital has not delivered audited financial statements for the limited partnership funds to investors for more than four years and is more than three years delinquent in registering two of the limited partnership funds with the Commission, as required by Section 12(g) of the Securities Exchange Act of 1934.”

💡 The company violated basic transparency and registration requirements for years without enforcement, allowing the fraud to continue while investors remained in the dark.