GPB Capital Holdings Lawsuit: Conviction, Receivership, and Payouts

The GPB Capital Holdings lawsuit refers to a cluster of federal criminal, SEC civil, state, and private class-action cases arising from a roughly $1.8 billion private-equity fraud that took money from more than 17,000 investors. Founder David Gentile and top salesman Jeffry Schneider were convicted of securities and wire fraud in August 2024 and sentenced in May 2025 to seven and six years, respectively. A court-appointed receiver has started returning money, mailing nearly $400 million in checks in April 2025, with more distributions approved since. In November 2025, President Trump commuted Gentile’s sentence and wiped out his $15.5 million restitution obligation.

What GPB Sold and Why It Collapsed

GPB Capital was a New York private-equity firm that pooled investor money into limited partnerships holding auto dealerships, waste-management companies, healthcare technology, and other middle-market businesses. The sales pitch was an 8% annual distribution, paid monthly, that GPB told investors was “fully covered” by portfolio company profits.¹

It wasn’t. Prosecutors said the portfolio companies never earned enough to cover the payouts, so GPB used more than $100 million from new investors to pay older ones, a structure regulators described as Ponzi-like.² Gentile and others back-dated “performance guarantees” and manipulated fund financials to make the distributions look like they were coming from real operations.³

Regulators also alleged self-dealing. Gentile and Schneider collected close to $2 million in undisclosed stipends and fees through entities they controlled, and Gentile used roughly $5 million of investor money to cover personal liabilities and luxury purchases, including a Ferrari. Between 2013 and 2018, GPB and its funds paid more than $77 million in fees and commissions to insider-controlled entities.⁴

The scheme began to unwind in mid-2018, when GPB suspended new contributions and redemptions because it could not file audited financial statements with the SEC.¹ The firm later acknowledged fund value declines of up to 73% and stopped paying dividends.

The Criminal Case

A federal grand jury in Brooklyn indicted Gentile, Schneider, and former managing partner Jeffrey Lash on February 4, 2021, for securities fraud, wire fraud, and conspiracy.⁵ Lash pleaded guilty to wire fraud in 2023 and testified against his co-defendants; he had not been sentenced as of mid-2025.⁶

After an eight-week trial before U.S. District Judge Rachel P. Kovner, a jury convicted Gentile on all counts on August 1, 2024. Schneider was convicted on all counts except a standalone wire fraud charge.⁷ On May 9, 2025, Judge Kovner sentenced Gentile to seven years and Schneider to six.²

Gentile’s Commutation

Gentile reported to federal prison on November 14, 2025. Twelve days later, on November 26, 2025, President Trump commuted his seven-year sentence and eliminated his court-ordered $15.5 million restitution obligation.⁸

White House Press Secretary Karoline Leavitt called the prosecution part of a “weaponization of justice” by the previous administration and said “at trial, the government was unable to tie any supposedly fraudulent representations to Mr. Gentile.”⁸ The prosecutors who handled the case disputed that characterization; U.S. Attorney Joseph Nocella, a Trump appointee, and FBI Assistant Director Christopher Raia had both publicly defended the conviction. Senators Ruben Gallego, Chris Van Hollen, and others wrote to the president calling the commutation “legally indefensible” and “morally reprehensible,” noting that roughly 4,000 victims were senior citizens who lost their retirement savings.⁹

Schneider did not receive clemency. According to the Wall Street Journal, he had not yet entered federal prison as of mid-2026 and has asked the trial judge to reduce his six-year sentence to time served, citing the disparity created by Gentile’s commutation.¹⁰

SEC Case and the Receivership

The SEC sued GPB Capital, Gentile, Schneider, Ascendant Capital, Ascendant Alternative Strategies, and Lash the same day as the criminal indictment. The complaint covered the distribution fraud and financial-statement manipulation, and it charged GPB with violating whistleblower protection rules by using restrictive language in termination agreements and by retaliating against a known whistleblower.³

The court first appointed Joseph T. Gardemal III as a monitor in February 2021. After the SEC accused Gentile of violating that order by appointing new managers and amending GPB’s operating agreement without approval, the court converted the monitorship into a full receivership on December 7, 2023. The Second Circuit affirmed that conversion in December 2024. Lash separately settled with the SEC in June 2023 through a partial consent judgment permanently barring him from future securities violations.¹¹

Money Going Back to Investors

Recovering assets and returning money to investors is the receiver’s central job. The court approved a plan of distribution on April 8, 2025, and on April 25, 2025, the receivership mailed about 13,700 checks totaling nearly $400 million to investors in GPB Holdings II, GPB Automotive Portfolio, and GPB Cold Storage.¹²¹³

More is coming. In January 2026, the receiver moved for approval of a $67.75 million settlement in Kinnie Ma IRA et al. v. Ascendant Capital, LLC et al., in which GPB Capital, the GPB Funds, and fund administrator Phoenix American Financial Services would contribute to an investor fund and the plaintiffs would release claims against the estate and assign the receiver rights to pursue certain third parties.¹³ A New York federal judge approved that settlement on April 2, 2026.¹⁴ The court is also weighing two additional settlements involving a Deloitte unit and the accounting firm Morrison Brown Argiz & Farra.

The Auditor Class-Action Settlement

Investors separately sued the accounting firms that audited GPB’s funds. Two class actions, Kinnie Ma v. Ascendant Capital in the Western District of Texas and DeLuca v. GPB Holdings in the Southern District of New York, alleged that five auditors negligently signed off on false financial statements that hid the fraud.¹⁵

On November 24, 2025, U.S. District Judge Alan D. Albright approved a $46 million settlement with CohnReznick LLP, Crowe LLP, Margolin Winer & Evens LLP, RSM US LLP, and WithumSmith+Brown PC.¹⁶ The class covers anyone who bought GPB fund units between January 1, 2013, and December 31, 2018, and lost money. Payments are proportional after deductions for taxes, administration, and court-approved attorneys’ fees.¹⁵ The DeLuca case was dismissed with prejudice on January 9, 2026.¹⁷

Claims Against Brokers Who Sold GPB Funds

GPB’s funds reached retail investors through a network of independent broker-dealers coordinated by Schneider’s placement agent, Ascendant Capital. Marketing materials leaned on the 8% yield and framed the products as safer than typical private placements, and brokers earned commissions as high as 9.3%.¹

In 2022, FINRA penalized 15 broker-dealers a combined $3.7 million for failing to tell customers that GPB had not filed required audited financials with the SEC. Four Advisor Group firms — FSC Securities, Royal Alliance Associates, SagePoint Financial, and Woodbury Financial Services — paid about $1.3 million of that total and faced at least 58 investor arbitrations alleging negligence, failure to supervise, and unsuitability.¹⁸

Atlanta-based Kalos Capital announced in October 2022 that it was closing after running up more than $9 million in legal fees and costs tied to GPB sales, and later filed for bankruptcy, leaving it uncertain whether investors who won arbitration awards ever collected. FINRA also suspended and fined individual registered representatives who recommended GPB products without adequate due diligence or suitability analysis.¹⁹

The New York Attorney General’s Case

New York Attorney General Letitia James sued GPB and the same core defendants on February 4, 2021, under the Martin Act and Executive Law § 63(12), alleging fraud of more than $700 million and seeking restitution, disgorgement, and permanent industry bars.²⁰ The case is still active. In April 2026, the Appellate Division granted Schneider and Ascendant Capital a stay of trial-court proceedings pending their appeal of a February 2026 order.²¹

1
Massachusetts Secretary of the Commonwealth. Massachusetts Securities Division Complaint Against GPB Capital
2
U.S. Department of Justice. Former Private Equity Executives Sentenced to Prison
3
U.S. Securities and Exchange Commission. SEC Charges GPB Capital Holdings for Fraud
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New York Attorney General. People v. GPB Capital Holdings Complaint
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U.S. Department of Justice. GPB Capital Founder and CEO Among Three Individuals Indicted
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Financial Advisor Magazine. Two New York Private Equity Execs Sentenced in $1.6B Funds Scheme
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U.S. Department of Justice. Founder of GPB Capital and CEO of Ascendant Capital Convicted of Fraud Charges
8
Politico. David Gentile Fraud Restitution Trump
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U.S. Senate. Letter to President Trump Regarding David Gentile Commutation
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Wall Street Journal. GPB Capital Fraud Co-Conspirator Jeffry Schneider Seeks Clemency
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U.S. Securities and Exchange Commission. SEC v. GPB Capital Holdings Litigation Release
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U.S. Securities and Exchange Commission. SEC v. GPB Capital Litigation Release No. 26290
13
Epiq. GPB Capital Holdings Receivership Information
14
Law360. GPB Investors Get $67.7M, Eye 2 More Settlements
15
GPB Securities Settlement. GPB Securities Settlement FAQ
16
King & Spalding. Texas Court Approves $46M Settlement in GPB Capital Litigation
17
CourtListener. DeLuca v. GPB Automotive Portfolio LP Docket
18
InvestmentNews. FINRA Dinged 15 B-Ds Over GPB in 2022
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InvestmentNews. FINRA Tags Advisor for Sales of GPB Alternatives
20
New York Attorney General. Attorney General James Sues Private Equity Fund Manager for Ponzi-Like Investment Scheme
21
New York Courts. People v. GPB Capital Holdings, Appellate Division Order