GPB Capital Holdings Investor Fraud Lawsuits

Harvey Kirk

By Harvey Kirk
Posted September 9, 2019

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The financial fraud lawyers at Saiontz & Kirk, P.A. are investigating investor claims against GPB Capitol Holding, and brokerages who sold this high-risk, private placement products to investors. Even as suspicions clearly began to emerge that this New York investment firm was running what appears to be a Ponzi scheme, GPB funds were sold to investors nationwide, who have now been left with substantial losses that should have been avoided.

Over the past year, problems with GPB funds have become more clear, resulting in significant investor losses and a number of on-going federal investigations. Two of the largest funds include GPB Automotive Portfolio, which has lost 39% of its value, and GPB Holdings II, which lost 25.4%.

Contact Our Lawyers To Review a GPB CAPITAL FRAUD CASE

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Saiontz & Kirk, PA, Attorneys & Lawyers, Baltimore, MD

Potential GPB Capital Holdings fraud lawsuits are being evaluated and reviewed for individuals who have suffered losses of at least $50,000 in any of the following funds:

  • GPB Automotive Portfolio, LP
  • GPB Cold Storage LP
  • GPB Holdings, LP
  • GPB Holdings II, LP
  • GPB Holdings III, LP
  • GPB Holdings Qualified, LP
  • GPB NYC Development, LP
  • GPB Waste Management Fund, LP

GPB Capitol Holdings funds were sold through about 80 brokerage firms, involving holdings in auto dealerships, waste management, and debt relief businesses.

While it claims to have generated about $1.5 to $1.8 billion in investments for those businesses, it now appears that massive financial fraud has been on-going for years, which brokerage firms and investment managers knew about or should have recognized.

In April 2018, the company missed an important financial filing deadline. It then stopped taking other investments and in December 2018 stopped paying out distributions.

In March 2019, the company was raided by the FBI and in June 2019 it announced significant losses in its two largest funds. It has overall stopped communicating with investors and faces a growing number of lawsuits claiming financial fraud and claims it falsified its records.

GPB Ponzi Scheme Claims

A growing number of financial loss claims suggest GPB was simply focused on getting new investors to buy into the funds, and paying earlier investors with funds received from new investments, which often involved a minimum investment of $100,000.

This is known as a Ponzi scheme, where new investments are used to pay all the other investors and the investors are told that the payments are profits. However, the problem is that it cannot be sustained. Eventually, there are too many investors or the pool of new investors dries up. Or, as may be the case here, suspicions arise and the scheme is uncovered. Often it is nearly impossible for investors to get their money back.

In addition to GPB Capital Holdings class action lawsuits, individual investment fraud claims are also being investigated against the dozens of brokerages who sold GPB funds. Those brokerages appeared to have failed to conduct due diligence on their clients behalf, which may have easily revealed problems with GPB financial products. However, brokers were paid commissions of more than 7% for bringing in new investors.

GPB Financial Fraud lawyers

The attorneys at Saiontz & Kirk, P.A. provide free consultations and claim evaluations to help investors determine if they may be able to recover financial losses associated with a GPB fund investment. It appears the firm and brokerages defrauded investors either through fraud or failure to investigate obvious problems with a fund due to high commissions.

Request a free consultation and claim evaluation to determine whether you or a loved one may have a GPB Investor lawsuit or arbitration claim. All claims are handled on a contingency fee basis, meaning there are no fees or out-of-pocket expenses unless a recovery is obtained.

Timeline of GPB Capital Fund Investment Problems

2013

GPB Capital Holdings launches, focused on auto dealerships and waste management.

April 2018

GPB missed a key filing deadline with the SEC.

August 2018

GPB announces that it will restate its 2015 and 2016 financial statements, saying it had discovered certain “material weakness in its internal controls.”

September 2018

SEC subpoena’s GPB to obtain internal financial information.

December 2018

GPB stops paying out distributions. FINRA and SEC launch investigations.

March 2019

GPB’s offices are raided by the FBI.

June 2019

GPB reports that its two largest investment funds, GPB Automotive Portfolio and GPB Holdings II lost 39% and 25% of their value, respectively.

July 2019

Former business partner David Rosenberg, chief executive of Prime Automotive Group, accuses GPB of serious financial misconduct, saying the firm ran a “Ponzi scheme.”

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