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(Ascendant Capital)

Jeffry Schneider, founder and CEO of the Austin-based real estate investment firm Ascendant Capital, was one of three men arrested on Thursday and charged with defrauding more than 17,000 investors of $1.7 billion in what the Securities and Exchange Commission described as a "Ponzi-like scheme."


"As alleged, by paying investors from an undisclosed and improper source such as investor capital, the defendants repeatedly misled investors about the health and performance of their investments," Acting United States Attorney for the Eastern District of New York Seth DuCharme said in a statement Thursday.

The trio is tied to the New York private equity firm GPB Capital Holdings. Owner and CEO David Gentile and former managing partner Jeffrey Lash were also arrested and charged, along with Schneider.

Between 2015 and 2018, the defendants allegedly promised investors 8% monthly dividends while using investor capital to make such payments. "Gentile and Schneider were aware that the GPB funds were underperforming and authorized repeated distribution payments that used investor funds to cover income shortfalls, to the obvious detriment of investors," according to a Department of Justice press release.

If convicted, each faces up to 20 years in prison.

The Securities and Exchange Commission also charged GPB with violating whistleblower protection laws by allegedly retaliating against a known whistleblower and including language in termination and separation agreements that impeded individuals from whistleblowing, according to a Thursday press release.

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