Convicted of fraud, GPB executives object to plans to return money to investors

Convicted of fraud, GPB executives object to plans to return money to investors
Gentile and Schneider were convicted of fraud and conspiracy after a seven week trial in federal court in Brooklyn.
FEB 19, 2025

Investors in high-risk private placements managed by GPB Capital Holdings have not seen any return from their investments since 2018, the last time any of the six funds paid out distributions to clients. 

After years of court battles and delays, that could be changing. 

In January, a court-appointed receiver in charge of distributing assets to 17,000 investors who bought $1.8 billion of GPB limited partnerships starting in 2013 submitted a plan to begin return money to investors. 

There will be winners and losers among the GPB investors waiting to get money back.

According to the receiver, the estimated range of recovery for some GPB clients is expected to be nothing, while others could receive back 80 cents to 100 cents on the dollar. Investors in one fund, GPB Cold Storage, could see gains of 40 percent to 50 percent.

But the latest roadblock in the return of investor money is a series of objections, including those by GPB executives convicted last summer of fraud.

The GPB receiver’s plan to return money to investors was filed in federal court in Brooklyn last month. On February 7, GPB founder and CEO David Gentile and broker-dealer chief Jeff Schneider filed a series of objections to the plan, claiming it would prevent them from receiving legal costs that were part of an earlier court ruling.

Gentile and Schneider in August were convicted of fraud and conspiracy after a seven-week trial in federal court in Brooklyn. They are scheduled for sentencing April.

The GPB executives’ objections to the plan to return money to investors drew criticism from industry attorneys and compliance executives.

“The audacity of these guys to hold back payment to these individuals who haven’t seen a dime in six years is outrageous,” said Adam Gana, a plaintiff’s attorney. “The court needs to move swiftly this year and compensate these people for time lost and any money they have been able to recover.”

“It’s horrible that this consideration even needs to be made,” said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. “These executives are the people who put the company, GPB, in this position and are now victimizing the victims all over again by preventing the distribution of funds to investors.”

Matt Menchel, an attorney for Gentile, did not return a call Wednesday afternoon to comment.

Founded in 2013, GPB Capital saw incredible growth selling its high-risk private placements through dozens of independent broker-dealers and five years later had raised $1.8 billion from wealthy clients looking for yield in a decade when interest rates were next to zero.

The firm had more than a half-dozen funds and targeted a steady 8 percent annual return to investors. Led by Gentile and Schneider, GPB first started ringing alarm bells in 2018, when it came to light that the company and its largest funds had failed to make timely required filings, including audited financial statements, with the Securities and Exchange Commission.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.