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NY equity management firm under investigation for alleged Ponzi scheme received $1.6 million in stimulus aid: WSJ

Ponzi scheme | Raw Story | Matthew Chapman | July 18, 2020

“On Saturday, The Wall Street Journal reported that one of the businesses that received stimulus through the embattled Paycheck Protection Program (PPP) was a private equity firm in New York accused of running a ‘Ponzi scheme.’

‘In New York City, the private-equity firm GPB Capital Holdings LLC is the target of several class-action lawsuits claiming that the firm operates as a Ponzi scheme,’ reported Cezary Podkul and Orla McCaffrey. ‘GPB itself has stated in a regulatory filing that it has been facing a variety of investigations, by the Securities and Exchange Commission and financial regulators in several states, including Massachusetts, which brought a civil fraud claim against the company in May.’

‘GPB and at least two of its affiliates in late April received PPP loans totaling upward of $1.6 million, according to data disclosed by the SBA and information provided by a GPB spokeswoman,’continued the report. ‘The spokeswoman said ‘both the application and use of funds were in direct accordance with the SBA guidelines.”

The Journal also found that funds have gone to ‘A Missouri televangelist and a Texas multilevel marketing company that were each warned by regulators for allegedly touting fake coronavirus treatments’ and ‘A Christian university based in California that pleaded guilty to a felony charge related to a $35 million money-laundering operation.’

The PPP has come under fire for a series of reports that the stimulus has gone in part to large businesses and other unintended recipients, rather than small businesses that depend on the loans for survival. Some of the money has even reportedly gone to dioceses of the Catholic Church that have paid out settlements in priest sexual abuse cases.

Some of these reports have prompted the Trump administration to ask for refunds from some of the entities, with Treasury Secretary Steve Mnuchin asking privately-endowed prep schools to return PPP money.”

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