GPB Capital Takes Millions in Fed Loan Money Amid an Investigation

According to the Small Business Administration (SBA), GPB Capital Holdings and affiliates have taken roughly $3-$7M this year in federal forgivable loan money for small businesses while facing serious investigations and investor lawsuits. 

According to the Department of the Treasury's website, GPB received almost $2M in PPP loans, and other businesses related to the firm also received the same or similar amounts. 

GPB Failed to Pay Distributions, Reported Decline

Starting in 2013, the firm raised approximately $1.8B from investors through sales of private partnerships. But, based on reports, GPB has not paid investors steady returns (distributions) since 2018. Plus, last year, the company reported significant declines in the value of its funds — what came as a big blow for investors. 

Over 60+ broker-dealers sold the GPB private placements with the promise of income in steady distributions. It is unclear if any of the money received by the firm from the Paycheck Protection Program will go to investors as it was initially established to help businesses pay workers through the COVID-19 pandemic. 

Joe Peiffer, one of the attorneys representing investors with accusations against the broker-dealers that sold the GPB private placements, voiced his concern about whether or not the money would be returned to investors. 

PPP Fund Receipts Looks Bad for GPB 

However, it does not look good for GPB. The Securities and Exchange Commission (SEC) and the FBI have been investigating GPB Capital Holdings. The FBI raided the company's offices back in 2019, and its former CCO was indicted last October for obstruction of justice. Plus, the firm has repeatedly missed deadlines for submitting audited financial statements regarding its funds. 

In May, William F. Galvin, the secretary of the Commonwealth of Massachusetts, charged the firm for defrauding 180 local investors who had purchase placements for products that charge steep commissions of 7%-8%. 

GPB Embroiled in Investigation with Scheme

Since GPB launched in 2013, it has specialized in buying auto dealerships and waste management businesses to produce high single-digit returns for investors. We’ve previously reported about the firm since it has been under SEC investigation after it failed to provide documentation to the regulator after investors noted that has suspicions about their money. 

Speak with an Investment Fraud Attorney

Our AV-rated* securities fraud lawyers have extensive experience litigating a broad range of cases including stockbroker and brokerage misconduct. If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have a proven track record of getting results for clients. 

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Contact a stockbroker misconduct attorney at Dimond Kaplan & Rothstein, P.A to schedule an appointment for a FREE case evaluation and speak with a leading expert in the field. 

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. to schedule a FREE case evaluation. Our offices are located in Los Angeles, New York, Detroit, West Palm Beach, Naples, and Miami, and we represent clients nationwide. Translation services are available.