A federal judge in Brooklyn last week approved the release of $400 million in funds to some of the beleaguered investors in GPB Capital Holdings who have not seen a nickel or returns since 2018, when the private placement investment scheme began to unravel. Meanwhile, the sentencing of two top GPB executives, founder David Gentile, and broker-dealer and sale chief Jeff Schneider, was scheduled for this week but has been moved to May, according to court filings. Last August, a jury in federal court in Brooklyn found Gentile guilty of five counts of fraud and Schneider three. The federal government’s charges stemmed from their management of GPB Capital Holdings, which was founded in 2013, GPB Capital. The money manager sold 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 ago when interest rates were next to zero.
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.