Last edited on Friday, February 26, 2021, at 4:52 AM.

Welcome to The Blanch Law Firm’s weekly digest of New New York Criminal Cases. Our goal is to keep the public informed as to recent events in federal courts around the country. 

As always, unless otherwise disclosed, none of the defendants mentioned in these summaries are clients of our firm.

If you or someone you love has been Charged with a state or federal criminal charge, or you are under investigation by the federal government, our top-rated attorneys are here to help.

Call us now for a free and completely confidential attorney phone consultation at (212) 736-3900.

Friday, February 05, 2021

I. Federal Arrest Announced as Part of Dollar General Shooting Investigation

On February 1, 2021, the U.S. Attorney for the District of Colorado Jason Dunn announced that Johnny Ray McCaslin, age 49, of Arvada has had been charged with being a felon in possession of firearm and ammunition.  McCaslin had his initial appearance in the U.S. District Court for the District of Colorado that afternoon.

According to the affidavit in support of the criminal complaint, evidence supporting the firearm charge was obtained as part of an investigation into a shooting at a Dollar General store in Arvada on in January 26, 2021.  Mr. McCaslin was identified as a suspect in that shooting, which led to a search warrant for his residence.  

During that search, investigators located two firearms and ammunition.  Mr. McCaslin has previously been convicted of felonies in the State of Colorado and is therefore prohibited from possessing firearms or ammunition.

Source: https://www.justice.gov/usao-co/pr/federal-arrest-announced-part-dollar-general-shooting-investigation

II. State Lawmaker Indicted for Stem Cell Fraud Scheme, Illegally Distributing Prescription Drugs

An elected Missouri state representative has been indicted by a Federal Grand Jury for a fraud scheme in which she made false claims about a supposed stem cell treatment marketed through her clinics in southern Missouri and for illegally providing prescription drugs to clients of those clinics.

Patricia “Tricia” Ashton Derges, 63, of Nixa, Missouri, was charged in a 20-count indictment returned under seal by a federal grand jury in Springfield, Mo. The indictment was unsealed and made public today following Derges’ self-surrender and initial court appearance. The federal indictment charges Derges with eight counts of wire fraud related to five specific victims (identified by their initials). 

These five victims were among those who lost a total of nearly $200,000 in the fraud scheme, which lasted from December 2018 to May 2020. During this time, Derges exclusively obtained amniotic fluid, which she marketed under the name Regenerative Biologics, from the University of Utah. Derges advertised Ozark Valley Medical Clinic as a “Leader in … Regenerative Medicine,” including stem cells, and marketed her “stem cell” practice through seminars, media interviews, and social media. 

The federal indictment cites an August 2019 seminar in which Derges told her audience that the amniotic fluid she used in her stem cell practice was a “stem cell shot” and that it contained “mesenchymal stem cells.” In fact, however, the amniotic fluid Derges administered to her patients did not contain stem cells of any kind. 

The amniotic fluid she obtained from the University of Utah was a sterile filtered amniotic fluid allograft (a tissue graft comprised of human amniotic membrane and amniotic fluid components derived from placental tissue) that was “acellular,” meaning it did not contain any cells, including stem cells. 

The University of Utah sold its amniotic fluid allograft to Derges for approximately $244 per milliliter and $438 for two milliliters. Derges charged her patients $950 to $1,450 per milliliter. In total, Derges’ patients paid her approximately $191,815 for amniotic fluid that did not contain stem cells.

Source: https://www.justice.gov/usao-wdmo/pr/state-lawmaker-indicted-stem-cell-fraud-scheme-illegally-distributing-prescription

III. Two Indicted on Charges Stemming From $100 Million Home Health Care Fraud and Money Laundering Scheme

Two women were arrested yesterday and charged in connection with a $100 million home health care fraud scheme. The government also filed a civil action seeking forfeiture of five properties and 40 financial accounts and investments involved in a scheme to launder the ill-gotten gains.  

Faith Newton, 52, of Westford, and Winnie Waruru, 41, of Lowell, were each indicted on one count of conspiracy to commit health care fraud; one count of healthcare fraud – aiding and abetting, and one count of conspiracy to pay and receive kickbacks. In addition, Newton was indicted on one count of money laundering conspiracy and seven counts of money laundering. 

In addition, Waruru was indicted on two counts of making false statements and one count of making a false statement in a health care matter. Newton and Waruru were arrested yesterday and will make an initial appearance in federal court in Boston today at 1:30 p.m.

According to the indictment, from January 2013 to January 2017, Newton was part owner and operator of Arbor Homecare Services LLC. Waruru was a Licensed Practical Nurse (LPN)employed as a home health nurse at Arbor. 

It is alleged that Newton and Waruru engaged in a conspiracy to use Arbor to defraud MassHealth and Medicare of at least $100 million by committing health care fraud and paying kickbacks to induce referrals. Newton then allegedly laundered the ill-gotten gains.

Source: https://www.justice.gov/usao-ma/pr/two-women-indicted-charges-stemming-100-million-home-health-care-fraud-and-money

IV. Ohio Man Charged with Possession of Explosive Devices and Illegal Firearm

On February 1, 2021, the Acting U.S. Attorney for the Northern District of Ohio Bridget M. Brennan, announced that a federal grand jury in Cleveland had returned a three-count indictment charging Oliver Smith, 51, of Youngstown, Ohio, with possession of explosive devices, felon in possession of a firearm and possession of an unregistered silencer.

According to court documents, in October 2020, the Adult Parole Authority (APA) and law enforcement agents learned that the defendant allegedly had in his possession a firearm with an attached silencer at his Youngstown-area residence. 

At the time of the incident, the defendant was on Community Control under the supervision of the APA related to a previous conviction of drug possession and was prohibited from possessing a firearm due to a previous conviction of aggravated assault.

Source: https://www.justice.gov/usao-ndoh/pr/youngstown-man-charged-possession-explosive-devices-and-illegal-firearm-0

V. Real Estate Developer, Three Others Charged in Mortgage Fraud Scheme

A federal grand jury has indicted a real estate developer and three others for allegedly participating in a mortgage fraud scheme that defrauded financial institutions out of at least $3 million. 

Andrzej Lajewski, who owned Des Plaines-based Highland Consulting Corp., and Chicago-based Quality Management and Remodeling Inc., schemed with two mortgage professionals and the owner of a remodeling company to fraudulently obtain at least $3 million in mortgage loans by making and causing to be made materially false representations to financial institutions regarding the buyers’ qualifications for the loans, according to an indictment returned Jan. 28, 2021, in U.S. District Court in Chicago.

According to the indictment, the false representations made concerned concerning the buyers’ employment history, income, assets, source of down payment, and intention to occupy the properties.  Sometimes, Lajewski fraudulently claimed to lenders that the buyers were employed by his companies, even though he knew that was untrue. 

That claim was intended to help buyers qualify for the mortgage loans. The alleged fraud scheme lasted from 2010 to 2016 and involved numerous properties on the South Side of Chicago. 

The indictment charges multiple counts of financial institution fraud against Lajewski, 53, formerly of Wheeling, the two mortgage professionals – loan originator Agnieszka Siekowski, 46, of Northbrook, and loan processor Aldona Bobrowicz, 45, of Arlington Heights – and the home remodeler, Andrzej Bukowski, 66, formerly of Wheeling.

Source: https://www.justice.gov/usao-ndil/pr/real-estate-developer-among-four-individuals-charged-mortgage-fraud-scheme

VI. Ohio Man Indicted on Meth Charge In West Virginia

Devante Crutez Taylor, of Columbus, Ohio, was indicted on February 2, 2021, on a drug charge, the U.S. Attorney for the District of West Virginia Bill Powell announced. Taylor, 28, was indicted on one count of Possession with Intent to Distribute 50 Grams or More of Methamphetamine. Taylor is accused of having 50 grams or more of methamphetamine in August 2019 in Ohio County.

The government is also seeking the forfeiture of $3,638 in cash found with Taylor that is believed to be proceeds from drug sales. If convicted, Taylor will face at least 10 ten years and up to life incarceration and a fine of up to $10,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. 

Assistant U.S. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Wheeling Police Department investigated.

Source: https://www.justice.gov/usao-ndwv/pr/columbus-man-indicted-methamphetamine-charge

VII. Former Navy CPO, Naval Reservist Indicted for ID Theft Scheme

On January 28, 2021, a federal grand jury in Fresno indicted Selma couple Marquis Asaad Hooper, 30, and Natasha Renee Chalk, 37, charging them with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.

According to court documents, Hooper was stationed in Japan as a Chief Petty Officer (CPO) with the Navy’s Seventh Fleet until October 2018. Chalk, his wife, was a naval reservist stationed at Naval Air Station Lemoore in California. 

Hooper separated from the Navy in October 2018, but shortly before his separation was final, Hooper and Chalk fraudulently obtained access to a database containing the personal information of millions of people. In August 2018, Hooper contacted the company, falsely claiming that the Seventh Fleet needed access to the database to run background checks on Navy personnel. 

In reality, Hooper was not acting on behalf of his fleet, and he did not access the database for a legitimate government purpose. Over more than two months, Hooper and Chalk searched for tens of thousands of individuals on the database and sold the information to third parties in exchange for bitcoin.

Source: https://www.justice.gov/usao-edca/pr/former-navy-chief-petty-officer-and-naval-reservist-indicted-id-theft-scheme

VIII. Proud Boys Member Charged with Offenses Related to Jan. 6 Riots

On February 3, 2021, a member of the Proud Boys, a nationalist organization, was arrested today and charged in federal court in the District of Columbia with obstructing or impeding an official proceeding, among other charges. 

Ethan Nordean, a/k/a Rufio Panman, 30, of Washington state, was charged by criminal complaint in District of Columbia federal court with obstructing or impeding an official proceeding, aiding and abetting, and knowingly entering or remaining in a restricted building, or grounds and violent entry and disorderly conduct on Capitol grounds. 

Nordean appeared in federal court in the Western District of Washington later the same day. According to charging documents, Nordean is the self-described “Sergeant of Arms” of the Seattle Chapter of the Proud Boys, a group self-described as a “pro-Western fraternal organization for men who refuse to apologize for creating the modern world; aka Western Chauvinists.” 

It is alleged that Nordean was observed marching at the front of a group of known Proud Boys shortly before the riot began. It is further alleged that Nordean was among those who entered the U.S. Capitol building after rioters, including certain persons associated with the Proud Boys, forced entry into the Capitol by means of destruction of Federal property. 

It is also alleged that Nordean was near the front of the crowd of rioters, who collectively approached, confronted, and vastly outnumbered Capitol Police.

Source: https://www.justice.gov/usao-dc/pr/member-proud-boys-charged-obstructing-official-proceeding-other-charges-related-jan-6

IX. Four Arrested and Charged with Physical Therapy Clinic Fraud

On February 4, 2021, four people were arrested and charged in Boston, Massachusetts, in connection with a scheme to defraud an insurance provider for physical therapy services that were not provided to patients.  

Gyulnara Bayryshova, 55, of Brighton; Anna Barenboym, 45, of Wayland; Slava Pride, 41, of West Roxbury; and Raya Bagardi, 36, of Brighton, were each indicted on one count of conspiracy to commit mail and health care fraud, eight counts of mail fraud and one count of health care fraud. 

In addition, Barenboym, Pride, and Bagardi were each charged with three counts of making false statements in connection with a health care benefit program. The defendants will make an initial appearance in federal court in Boston later today.

As alleged in the indictment, Bayryshova was the owner of Brighton Physical Therapy (BPT), a physical therapy clinic on Washington Street in Brighton. Barenboym was a licensed physical therapist, and Pride and Bagardi were licensed physical therapist assistants, all employed by BPT. 

It is alleged that, from October 2018 through June 2020, the defendants conspired to cause an insurance company to reimburse them for physical therapy services that were not actually provided and/or were not medically necessary and, in some cases, were provided by individuals not licensed to provide the services. 

Specifically, the defendants falsely billed for services purportedly rendered to patients injured in automobile accidents when the services were not actually provided. In addition, some of the services for which the defendants sought reimbursement were not provided by licensed physical therapists. 

It is further alleged that BPT paid patients for referrals, referred patients to attorneys to assist with patients’ insurance settlements, and accepted kickbacks from those attorneys in return.

Source: https://www.justice.gov/usao-ma/pr/four-individuals-arrested-and-charged-physical-therapy-clinic-fraud

X. Former Nike Marketing Manager Charged in Scheme to Defraud Company

On February 4, 2021, the U.S. Attorney for the District of Oregon Billy J. Williams announced that Errol Amorin Andam, 49, of Beaverton, Oregon, a former marketing manager at Nike, Inc., has been charged by criminal information with wire fraud, money laundering, and making false statements on a loan application as part of a scheme to defraud his former employer.

According to the information, from 2001 until his termination in 2018, Andam was employed by Nike at its headquarters in Beaverton. Most recently, Andam worked as a manager in the company’s North American Retail Brand Marketing division, wherein he managed the design, build-out, and operation of “pop-up” retail venues, temporary Nike shops situated near and tailored to sports competitions, and other special events around the U.S. 

In the summer of 2016, Andam recruited a childhood friend to establish a company to design and build the pop-up venues as an independent contractor for Nike. Andam used his authority as a manager at Nike to ensure that his friend’s company was consistently awarded the contracts for these jobs. 

Though he had no formal role in his friend’s company, Andam assumed control of much of the company’s financial operations, managing financial accounts and issuing invoices to Nike. To conceal his role in the scheme, Andam used an alter ego, “Frank Little,” to invoice Nike and manage the contract company’s account with Square, Inc., a California-based provider of mobile credit-card-processing services. 

In 2016, Andam also renewed the lapsed registration of an Oregon-based limited liability corporation (LLC) he owned so that he could use the defunct entity as a shell company to funnel the proceeds diverted from Nike and his friend’s company to accounts under his personal control.

Source: https://www.justice.gov/usao-or/pr/former-nike-marketing-manager-charged-scheme-defraud-company

XI. Albany Man Charged with Obstruction of Justice and Violating Release Conditions

On January 29, 2021, Michael P. Fish, 25, of Albany, was charged with obstruction of justice and committing a felony offense while on release for submitting fraudulent character letters to the U.S. District Judge overseeing his federal criminal case. 

The announcement of the charges was made by Antoinette T. Bacon, the Acting U.S. Attorney for the Northern District of New York, along with Thomas F. Relford, Special Agent in Charge of the FBI’s Albany Field Office.

The criminal complaint alleges that Fish, who pled guilty to computer hacking, aggravated identity theft, and child pornography offenses in May 2020, submitted six fraudulent character letters to U.S. District Judge Mae A. D’Agostino.  

According to the complaint, Fish doctored letters, including one from a Catholic priest, and created letters purportedly from others, including his mother and grandparents.  The fraudulent letters spoke of Fish’s good character and asked Judge D’Agostino to impose a lenient sentence. 

If convicted, Fish faces up to 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years.

Source: https://www.justice.gov/usao-ndny/pr/albany-man-charged-obstruction-justice-and-violating-release-conditions

XII. Promoter of Foreign Cryptocurrency Companies Charged in $11 Million-Plus Securities Fraud Scheme

A California man was charged in a complaint unsealed on February 1, 2021, for his alleged participation in a coordinated cryptocurrency and securities fraud scheme that used purported digital currency platforms and foreign-based financial accounts. 

John DeMarr, 55, of Santa Ana, California, was charged in a complaint filed in the Eastern District of New York with one count of conspiracy to commit securities fraud. DeMarr made his initial appearance that afternoon before U.S. Magistrate Judge John D. Early of the Central District of California. Judge Early referred the case to the Eastern District of New York for further proceedings.

According to the allegations, DeMarr’s businesses, Start Options, and B2G were both fraudulent. In approximately December 2017, DeMarr and others began offering securities in the form of investment contracts to the U.S. and international investors through the Start Options website. Investments were accepted in Bitcoin, U.S. dollars, or Euros. 

To participate, investors had to deposit their funds for a specified contract period, after which they could purportedly withdraw their money at a significant profit.  Among other things, DeMarr and others falsely claimed that investor funds would be invested in digital asset mining and trading platforms that would earn them massive profits. 

In truth, however, the money was never invested and was instead diverted to accounts controlled by DeMarr and others and used for various personal expenditures, including the purchase of a Porsche, jewelry, and renovations to DeMarr’s home in California.

Source: https://www.justice.gov/opa/pr/us-based-promoter-foreign-cryptocurrency-companies-charged-over-11-million-securities-fraud

XIII. Quebec Man Indicted by Grand Jury For Multi-Million Dollar Fraud Scheme Targeting Elderly Victims

On February 1, 2021, the U.S. Attorney for the Western District of New York James P. Kennedy, Jr., announced that a federal grand jury returned an indictment charging Martin Hogan, 52, of Montreal, Quebec, Canada, with conspiracy to commit wire and mail fraud, wire fraud, mail fraud, and international money laundering conspiracy. If convicted, Hgan faces up to 30 years in prison and a $250,000 fine. 

According to the indictment, Hogan would place telephone calls from Canada to victims in the United States and tell victims that they had won the Canadian lottery. However, before collecting their winnings, victims had to first pay the taxes, brokerage fee, and/or custom, fees due in connection with the winnings. 

Victims were instructed by the defendant and others to pay these taxes, brokerage fees, and/or customs fees by wire transferring funds to a bank account in Rochester, NY, controlled by co-defendant Bernard Perkins, or by mailing funds to Perkins or addresses in the United States controlled by co-defendants Anthony Laughing, Jr., Cory LaPlant and others. 

After receiving funds from victims, defendants Bernard Perkins, Anthony Laughing, Jr., and Cory LaPlant would keep a small portion of the funds and then pay co-defendants Devlin Laughing and Brenda Garrow to smuggle the remaining funds from the United States to the defendant Hogan in Canada. 

As a result of this fraudulent telemarketing scheme, defendant Hogan and his co-defendants caused approximately 37 victims over the age of 55 to mail approximately 200 packages and wire transfer funds totaling approximately $2 million.

Source: https://www.justice.gov/usao-wdny/pr/quebec-man-indicted-federal-grand-jury-multi-million-dollar-fraud-schemetargeting

XIV. Buffalo Man Arrested, Charged as Felon In Possession Of A Firearm

On February 3, 2021, the U.S. Attorney for the Western District of New York James P. Kennedy, Jr., announced that Kaylen Edwards, 22, of Buffalo, NY, was arrested and charged by complaint with being a felon in possession of a firearm. 

Assistant U.S. Attorney Meghan E. Leydecker, who is handling the case, stated that on November 7, 2020, Cheektowaga Police Officers responded to Pinehurst Avenue, where a limousine bus party was being let out, following a report of disorderly persons. 

According to the complaint, earlier that day, the defendant was identified on social media flashing a black and silver handgun and wearing a distinct black and red jacket inside the limousine bus. A member of law enforcement sent a photo of the social media post to responding officers. 

On Pinehurst Avenue, officers observed Edwards getting into the front passenger seat of a vehicle with Georgia license plates and leaving the area. The officers then observed the vehicle in violation of multiple vehicle and traffic infractions and conducted a traffic stop. 

The officers observed a marijuana cigar end in the center console area and immediately detected the odor of burnt marijuana emanating from the vehicle. Officers identified Edwards as the passenger. The defendant was detained. During a pat frisk, an officer felt and observed a handgun in Edwards’ side waistband. 

The handgun was loaded with a magazine containing seven .45 caliber rounds and one .45 caliber round in the chamber. In November 2017, the defendant was convicted of Attempted Criminal Possession of a Weapon in New York State Court, and as a result of that conviction, he is prohibited from legally possessing a firearm.

Source: https://www.justice.gov/usao-wdny/pr/buffalo-man-arrested-charged-being-felon-possession-firearm

XV. Tonawanda Man Arrested On Child Pornography Charge After Hidden Camera Discovered

On February 3, 2021, the U.S. Attorney for the Western District of New York James P. Kennedy, Jr., announced that Andrew Vallone, 44, of Tonawanda, NY, was arrested and charged by criminal complaint with attempting to produce child pornography. If convicted, Vallone faces at least 15 years and up to 30 years in prison and a $250,000 fine.

According to the criminal complaint, an individual contacted the Town of Tonawanda Police Department after discovering a video depicting a child (Victim) wearing only a pair of underwear on a desktop computer belonging to Vallone. 

On January 23, 2021, the Tonawanda Police contacted the FBI, and further investigation determined that Vallone had secreted a camera in a location which that allowed him surreptitiously to film the Victim. The MicroSD card recovered from that hidden camera contained numerous images which depicted the Victim in various states of undress. 

Additionally, on January 29, 2021, the New York State Police contacted investigators regarding an email that Vallone sent to a mental health counselor. In the email, the defendant stated that he liked to look at younger girls and “I need help.”

Source: https://www.justice.gov/usao-wdny/pr/tonawanda-man-arrested-child-pornography-charge-after-hidden-camera-discovered

XVI. Indictment Charges Rochester Man With Sex Trafficking, Enticement, And Possession Of Child Pornography

On February 2, 2021, the U.S. Attorney for the Western District of New York James P. Kennedy, Jr., announced that a federal grand jury had returned a superseding indictment charging Peter R. Kiwitt, 62, of Rochester, NY, with sex trafficking of a minor, sex trafficking by coercion, sexual enticement of a minor, and possession of child pornography.  

The superseding indictment also alleges that the defendant, as a registered sex offender, faces enhanced penalties in the event he is convicted of certain of the crimes with which he is charged. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $250,000 fine.

According to the superseding indictment and a previously filed complaint, on December 10, 2018, the Monroe County Sheriff’s Office stopped a vehicle being driven by Kiwitt. Also in the vehicle were two females, Adult Victim 1 (AV1) and Minor Victim 1 (MV1). 

The three were questioned regarding drug related drug-related activity but were released and eventually followed to a room at a motel in Penfield, NY. Officers went to the room and knocked on the door. Kiwitt indicated that he was dating AV1 but knew her to be a prostitute who belonged to another pimp known to law enforcement.  

He denied any involvement in prostitution at that time. Officers did not make any arrests at the time. On January 23, 2019, Rochester Police Department officers responded to a residence in the City of Rochester for the report of a fatal overdose involving MV1. The owner of the apartment found MV1 deceased on his living room floor and called 911. He told officers he met MV1 through AV1 and that the night before, he brought MV1 back to his residence to engage in commercial sex acts with her. 

Subsequent cell phone and Facebook searches uncovered conversations between the defendant, AV1, and MV1 regarding prostitution activities. Investigators also uncovered naked photos, some of which depicted child pornography. In June 2017, Kiwitt was convicted in Monroe County, NY, of Possession of a Sexual Performance by a Child, and sentenced to serve 10 ten years’ probation, and designated as a Level 1 Sex Offender. The defendant was arraigned before U.S. Magistrate Judge Mark W. Pedersen and was detained.

Source: https://www.justice.gov/usao-wdny/pr/federal-grand-jury-charges-rochester-man-sex-trafficking-enticement-and-possession

XVII. GPB Capital Founder and CEO Among Three Individuals Indicted in Private Equity Investment Fraud

On February 4, 2021, an indictment was unsealed today in Brooklyn federal court charging three people affiliated with GPB Capital Holdings, LLC (GPB) with securities fraud, wire fraud, and conspiracy.  

Defendants David Gentile, the founder, owner, and CEO of GPB; Jeffry Schneider, the owner and CEO of Ascendant Capital LLC (Ascendant); and Jeffrey Lash, a former managing partner of GPB, are charged with engaging in a scheme to defraud investors by misrepresenting the source of funds used to make monthly distribution payments to them and the amount of revenue generated by two of GPB’s investment funds, GPB Holdings, LP and GPB Automotive Portfolio, LP. 

The defendants were arrested on Feb. 1, and Gentile appeared that afternoon in federal court in Boston, Massachusetts, Schneider appeared in federal court in Austin, Texas, and Lash in federal court in Fort Myers, Florida. Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge of the FBI’s New York Field Office, announced the charges.

As detailed in the indictment and other court documents, GPB, founded by Gentile in or around 2013, was a New York-based investment advisor registered with the SEC.  GPB served as the general partner of several investment funds, including GPB Holdings, LP (“Holdings I”), GPB Holdings II, LP (“Holdings II”), GPB Automotive Portfolio, LP (“Automotive Portfolio”), GPB Waste Management, LP (“Waste Management”) and GPB Cold Storage, LP (“Cold Storage”) (collectively, the “GPB Funds”).  

The business of GPB Capital was to manage the GPB Funds, which raised and invested capital in a portfolio of private equity investments.  Gentile and Schneider worked closely together on the founding, development, operation, and marketing of the GPB Funds.  From 2013 through early 2018, Lash was responsible for overseeing the GPB Funds’ investments in car dealerships, which made up a sizable percentage of GPB’s portfolio companies. 

Between August 2015 and December 2018, the defendants and others allegedly engaged in a scheme to defraud investors and prospective investors in the GPB Funds through material misrepresentations and omissions. 

Specifically, Gentile and Schneider, both individually and through employees at Ascendant, represented to investors that the GPB funds would make a monthly distribution payment to investors that would be fully covered by funds from operations, meaning that the companies purchased by the funds would be sufficiently profitable, without drawing from capital raised by investors.

Source: https://www.justice.gov/usao-edny/pr/gpb-capital-founder-and-ceo-among-three-individuals-indicted-private-equity-investment