Economic system7 hours ago (Feb 09, 2021 01: 25PM ET)
© Reuters. FILE PHOTO: FILE PHOTO: The U.S. Securities and Substitute Charge logo adorns an place of job door
By Jonathan Stempel
NEW YORK (Reuters) – The founding father of a Contemporary York cash supervisor who authorities said ran a $1.8 billion fraud similar to a Ponzi plot that fleeced hundreds of investors pleaded no longer responsible to fraud and conspiracy expenses on Tuesday.
David Gentile, who till final week modified into as soon as chief govt of GPB Capital Holdings LLC, entered his plea by draw of his authorized official to a 5-depend indictment at a listening to in Brooklyn federal court docket.
Bail modified into as soon as predicament at $500,000, secured by Gentile’s home in Manhasset, Contemporary York. The married father of four is forbidden from talking with GPB investors about the criminal case.
Seven U.S. states and the Securities and Substitute Charge contain opened linked civil complaints.
Gentile and other defendants, including two americans, were accused of defrauding extra than 17,000 retail investors over several years.
Investors in GPB funds were allegedly misled into believing they were making a hit non-public equity investments, when the truth is unusual investor cash modified into as soon as used to offer the 8% annual returns promised to earlier investors.
Authorities said the actual person defendants moreover diverted investor cash to subsidize luxuries for themselves, including a $355,000 Ferrari (NYSE:) FF for Gentile.
Title to the Ferrari modified into as soon as by no approach transferred to Gentile, and investors bore a $183,000 loss when GPB supplied the auto after two years, in defending with Contemporary York Prison official Overall Letitia James.
Her place of job is seeking extra than $700 million of restitution.
GPB is a defendant in civil complaints, but is no longer a defendant in the criminal case. It has denied allegations it faces, and final week said Gentile modified into as soon as stepping down as chief govt “till fresh matters are resolved.”
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