David Gentile, Securities Fraud, New York 2024

Grimy Times has learned that two former private equity executives have been sentenced to prison in a scheme to defraud over 10,000 investors out of more than $1.6 billion.

David Gentile, the founder and former Chief Executive Officer (CEO) of GPB Capital, was sentenced to seven years in prison, while Jeffry Schneider, the former CEO of Ascendant Capital, received a six-year sentence for their roles in the multi-year scheme.

The scheme involved misrepresenting the performance of three GPB Capital private equity funds and the source of funds used to make monthly distribution payments to investors.

According to prosecutors, Gentile and Schneider used the misrepresentations to raise approximately $1.6 billion from individual investors. The funds were presented as ‘income-producing’ private equity investments, promising monthly distributions and a return on investment at the end of the fund.

However, investigators found that the defendants had used investor capital to pay distributions and create a false appearance of success. The scheme was uncovered after an eight-week trial in August 2024, where Gentile and Schneider were convicted of securities fraud, securities fraud conspiracy, and wire fraud conspiracy.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, praised the efforts of investigators in bringing the case to justice. ‘The defendants built GPB Capital on a foundation of lies,’ he said. ‘They raised approximately $1.6 billion from individual investors based on false promises of generating investment returns from the profits of portfolio companies.’

Christopher G. Raia, Assistant Director in Charge of the FBI’s New York Field Office, added that the defendants had abused their high-ranking positions to exploit the trust of investors and manipulate payments to perpetuate the scheme.

Gentile and Schneider will face additional penalties of forfeiture and restitution at a later date.

Related Federal Cases